Queen’s Speech — House of Lords, 2017-06-28
Topic: Macroeconomics
John Davies (Labour, Centre-left): My Lords, I shall probably say only one thing this evening that gives any pleasure to anybody on the other side of the House but I say it very sincerely. I warmly congratulate the noble Baroness, Lady Anelay—who is just walking out of the Chamber—on her appointment. At present, the Government must be in very dire need of someone of her abilities, judgment and natural diplomacy A few weeks ago, an acquaintance asked me, "How long are you remainers going to bang on about the costs of Brexit?". I responded to her, "As long as the costs of Brexit continue to bear on the British people". If we leave the European Union, they certainly will for many years and probably decades—almost certainly long after the limit of my own existence here I think that the British people are at the very beginning of the process of recognising the damage that has already been done subsequent to last year’s referendum. There has been a 15% devaluation, and people are beginning to realise that it really does mean a 15% reduction in the real value of everybody’s sterling assets or revenues. Perhaps wealthy people have internationally diversified portfolios and will not be hit quite so much, but those with more modest fortunes—most British families—will all be hit by at least 15%. That is a very serious matter We are now facing rising inflation and we know that this year real wages will fall. We know that the Bank of England will face increasing problems in confronting the great difficulty of knowing whether to increase interest rates. If they continue with the present accommodating monetary policy, that will simply embed inflation, and if they increase interest rates, that will further hit the growth of the economy. We have also had the results for the first quarter of this year, which show that the economic growth rate in this country is now at the absolute bottom of the EU 28 countries, together with Italy. So the prospects are pretty appalling One has to ask why the British people voted for such a disaster. We now know the answer, because Mr Dominic Cummings, who organised the Brexit campaign, told the Times a couple of weeks ago—he said it in a rather self-congratulatory way—that he was convinced that it was because of the big lie of saying that there would be £350 million a week more for the NHS if we left the EU. So now we have it, and terrible damage has been done to our country—quite the worst damage of any kind of crisis that I can think of in my lifetime—and it is all the result of a big lie. Essentially, the British people have been swindled by a bunch of professional liars. There is no hyperbole in that statement; it is exactly how these people, in a self-congratulatory way, have announced their great accomplishment. It is a pretty grim situation and we all have to reflect on it quite carefully The Government tend to say, "Well, we are where we are". I think that if I hear that cliché again I shall have a seizure. "We need to move on", is another one. They also say, "Let’s talk about the opportunities". Well, let us talk about the opportunities—that is exactly what I want to talk about. I keep hearing about the opportunities that are being opened up to us with Brexit, but what are they? We all know the opportunities that are being destroyed by Brexit, such as the opportunity to go and work abroad. That is a very important opportunity, which as a younger man I enjoyed myself. Another is the opportunity to study in another country and take advantage of the Erasmus educational exchange programme, from which hundreds of thousands—maybe millions—of young people in this country have benefited. It is a wonderful system. There are also the opportunities for scientific research, and to lead in this country programmes of scientific research funded by the European Union. We know that at the prospect of those closing down, whole teams of academics are now moving abroad and being recruited by continental universities. There are no opportunities there—only an obstruction of opportunities What about the economy? You do not create opportunities by putting a dagger in your economy. You destroy opportunities by reducing the growth rate in the economy and reducing national wealth. You destroy entrepreneurial opportunities, job opportunities, opportunities for innovation and opportunities for enhancing the quality of human life. There are no opportunities there at all In my view, no opportunities for trade are being opened up by our leaving the European Union. The whole point of the European Union—or at least one of the major points of the single market—is that people have advantages in a larger domestic market with economies of scale and longer production runs. They get more business outside that single market, and that has worked out very well. France, for example—a country with a similar population—has a considerably higher level of exports than we have. If we do not think we are doing very well, we should ask ourselves what is wrong with our country and why productivity, for example, is so low. That will not be helped by leaving the European Union. On the contrary, anybody with any knowledge of economics would say that the two things you want to do if you want to improve productivity are to increase competition and increase investment. By leaving the European Union, we will reduce competition and we are already, with the prospect of leaving the EU, reducing the level of investment. Therefore, there are no opportunities there at all One thing one hears the Brexiters say is, "We’re going to sign all these free trade agreements around the world with non-EU countries". Earlier we heard a splendid speech from my noble friend to my right, in which he said that, if we leave the European Union, we start off by losing access not merely to the EU market on the favourable terms that we now have but to 45 other countries that have FTAs with the EU. Renegotiating with them would take years and years—a minimum of five and perhaps 10 If we start talking to other countries, what is the basis of the deal that we might do with them? If we go to China and say, "We’d like to have an FTA with you", the first thing the Chinese will say is, "Well, we’d like you to get rid of the EU steel quotas, please". That is fine but what are the Government going to say to the workers at Port Talbot to whom they have made promises? If we go to India, Mr Modi will say, "The first thing on my agenda is that I want more immigration into the UK". That will be pretty rum because apparently we have to leave the single market as we have too much immigration and want to bring it down to tens of thousands a year, so we cannot fulfil that particular requirement. If we go to Australia or New Zealand, we shall be told, "Well, the first thing we want to do is sell you more meat". We will have enormous vessels arriving with frozen meat from those countries every week, which will put out of business large sections of the British livestock industry. Is that what we are going to do? Is that what the Government consider to be an opportunity? If we go to the United States, the same thing will happen, except that the meat will come full of hormones and antibiotics, with threats to public health There are no opportunities that I have heard of. I asked the noble Lord, Lord Bridges, when he was the relevant Minister, what the opportunities were but he never gave an answer. I ask the Government the same question tonight, so perhaps we will hear the answer later. What are the opportunities? I do not believe that there are any. I believe that we are adding incompetence to self-delusion on this matter, and the prospects for the country are very serious.