Queen’s Speech — House of Lords, 2017-06-28
Topic: Macroeconomics
John Birt (Crossbench, Unknown): My Lords, we are mired in crisis. Our economy, our public finances, our Brexit negotiating leverage and our Government are all weak, not strong. The causes of this run deep. The UK was ill prepared for the sharp global shock of 2008. After a period of overoptimism in our public finances and of inadequate financial regulation, our cupboard was bare. So nearly 10 years later, we are still borrowing. We have the fourth-highest deficit of 35 advanced economies and are projected not to reach surplus till 2025. Everything and everyone have been affected by our massive reversal of fortune Public funding is constrained, and services are stretched. The average British worker will earn less in real terms in 2021 than in 2008. Our currency has declined in value, and inflation is rising. We are now the worst-performing economy in the G7. Interest rates may soon rise and put a further burden on government finances. Meanwhile, our productivity remains stubbornly low, and we feel the pinch of decades of underinvestment in infrastructure. We have not, in recent times, governed ourselves well as a country Against this unhappy backdrop, the decision was taken to hold a referendum. During the referendum campaign, neither of our main parties, for quite different reasons, laid bare the full consequences of leaving the EU. Laying disaster on disaster, an election, held to strengthen the Government’s hand in the Brexit negotiations, has fatally weakened it. During the election campaign, there was still no meaningful debate about the Brexit options, nor about the parlous state of our economy or the interplay between the two; rather, as we know, populism ruled. An electorate understandably dispirited by austerity were told what they wanted to hear rather than exposed to unwelcome realities Moreover, neither main party showed any respect for, or understanding of, the real economy, which is the motor of our prosperity. The dazzling professionals from around the world who populate our financial and corporate sectors were offensively dubbed "citizens of nowhere". The Opposition, on the other hand, threatened to raise corporation tax, and further to set the highest tax burden the UK has known for 30 years, on the very eve of Brexit—at just the moment when we need to lure business and talent to stay in the UK, not to frighten them away. When we most needed a mature debate about Britain’s future, we failed to have one The British people voted for Brexit, and it must be delivered. But they did not vote for any particular form of Brexit, and they will not thank anyone if a cliff-edge Brexit provokes a deepening and ever-extending austerity and long-term relative impoverishment. None of my noble friend Lord Bird’s drinking friends, on either side of the argument, will welcome that. Our highest priority in these negotiations must be—as so many have said in one form or another—free, frictionless trade with what is by far the world’s biggest economic bloc. To achieve that, we will have to come to our senses and compromise on any number of matters, but above all perhaps on immigration It is absurd to define students as immigrants. We cannot denude business of some of the world’s best talents. It is not remotely clear who will work in our care homes or pick our strawberries if we stick to the Government’s declared targets for net migration. Let us also face up to the fact that our economy and our public finances are not remotely healthy enough to withstand the shock of a cliff-edge Brexit The Government are in power but without a mandate. The forces of moderation and realism on all sides in both Houses of Parliament must now come together, not to frustrate Brexit but to ensure that the effective functioning of our economy is our prime consideration, and that our exit is graduated. That is surely the spirit of this eloquent debate and that is the message that I hope the Minister will take away tonight.