Queen’s Speech — House of Lords, 2022-05-16
Topic: Macroeconomics
Questions: 2050—I am just 100 years out. Even if we get to that, a lot of countries in the world will not. Two things follow from that. The first is that climate change will not be significantly improved. We in this country produce 1% of the world’s emissions, so if we have all the struggles and make the vast expenditures but other countries do not, we will not have achieved anything so far as climate change is concerned Secondly, if we have spent an enormous amount of money improving our electricity and getting it all done, our electricity will almost certainly be more expensive than it is in other countries. There is a danger we have to watch, as the heavy industrial users of electricity will build their factories in other countries, not in those that have spent all that money on this. We have the time to deal with this, but we have to be very careful that that is not the end result of what we do.
Christopher Samuel Tugendhat (Conservative, Centre-right): My Lords, I feel that the circumstances in which this debate is being held are rather like those described in the American satirical film "Don’t Look Up", which many noble Lords may have seen. Those who have will remember that it is about a meteor heading towards earth. The President of the United States is warned about this, but she is so much engaged in safeguarding her own position, scoring points off her opponents and laying traps for those who disagree with her that her attention does not turn to this terrible thing until far too late. I feel that the same rather applies at the moment to the meteor that is heading towards us, to which so many noble Lords have referred: inflation. Indeed, it is not heading towards us; it has already arrived, to a great extent. What strikes me and obviously others in this debate is the complete absence of urgency in the Government’s response. When one looks back on it, the Spring Statement is striking in the inadequacy of the way that it approached this matter. The Queen’s Speech seems to have been drawn up without any regard to the clear and present danger confronting us I was going to digress at this point to say a few words about the Bank of England, but my noble friends Lord Forsyth and Lady Noakes and others have said all that is to be said, and I associate myself completely with the points made by my noble friend Lord Forsyth in particular. I also agree with my noble friend Lord Bridges that with independence comes accountability, and the Bank of England will have to explain exactly what has happened—but not only the Bank of England. It has now been independent in this sphere for 25 years, and the time has perhaps come to look at the way in which the mandate is being carried out and, in particular, to look at two problems or issues. The first is whether the members of the Monetary Policy Committee are drawn from a sufficiently wide circle. The second is whether the present inflation-targeting objective should be replaced or coupled with another objective relating to nominal GDP The meteor of inflation is not the only one that the Government have failed to warn the country about. We have gung-ho speeches from the Foreign Secretary and the Defence Secretary about the war in Ukraine, but nothing has been done to explain to the nation the implications of the war for our economy. I refer here not just to the fighting, obviously, but to the consequences of the sanctions. To the extent that trade is disrupted and the international economy is thrown into chaos, the implications could be very great We are not in a war situation, and God forbid that we should ever get in one, but we may well be approaching a situation in which we are in something akin to a war economy. Should that occur—the chances of it occurring are quite considerable—the Government have to think about which priorities they will safeguard. Clearly, one of them must be the continued improvement of the National Health Service on the one hand and social care on the other. We have talked a great deal about inequalities, but there is no area in which they are more self-evident than the nation’s health from one region to another It will also be very important to recognise that more money will have to be spent on defence. I was very surprised that there was no mention of this in the Queen’s Speech. This is also bound to lead to some other programmes being cut, which emphasises the need for priorities We are in a very dangerous situation. I agree with those who say that, unfortunately, the Government have so far not shown themselves to be in a position to face up to it.