Queen’s Speech — House of Lords, 2015-06-04
Topic: Macroeconomics
Terence Langley Higgins (Conservative, Centre-right): My Lords, it is a great pleasure to welcome the noble Lord, Lord O’Neill of Gatley, to the House and congratulate him on his maiden speech. It is not an easy thing to make a maiden speech from the Front Bench and to combine those things adequately. I had the same experience when I entered the House but I had the disadvantage of doing so in opposition. I am delighted that the noble Lord has the chance to do so in government One looks forward with great pleasure to the maiden speech of the noble Lord, Lord King of Lothbury, who will certainly make a major contribution to our debates, not least, of course, as far as banking is concerned. I also look forward to hearing the maiden speech of the noble Baroness, Lady Altmann, in due course, although she is not down to speak today. When I served for a decade or so on the Front Bench as the main spokesman on pensions, I benefited enormously from her comments outside the House. It is very good indeed that we shall have the opportunity to hear her views first-hand rather than from the sidelines We are lucky to have those who are now joining us at a time which I think is more difficult than any I can remember in the last 50 years or so as regards both the mass of difficult problems at home and impending dangers—the well-known expression—abroad. I benefited greatly from a very good article by Professor Vernon Bogdanor, The Crisis of the Constitution, in which he analyses the way in which we have a whole series of interlocking crises. We have a Scottish problem following in the aftermath of the referendum, a European problem with the anticipated referendum, a human rights problem, an English problem in terms of English votes and so on and a crisis of representation in a multi-party system. This is all extremely difficult and the problem arises from the way in which each of these crises interlock. As I say, this is well analysed in the article to which I referred In the short time I have I want to concentrate on two things: the deficit on the one hand and the European referendum and our lead in Europe on the other. I am afraid that there is still enormous confusion in the press between the deficit and debt. The two are not the same. The extraordinary thing about the deficit is that it has been overwhelmingly at the centre of our economic problems for the last five years, and will continue to be so for the next five years, but there is no mention of it in the gracious Speech. That is curious. What the Government are planning to do will be immensely difficult to achieve over the next five years, not least because so many areas have been ruled out as far as making economies is concerned. I do not know whether legislating at this stage in the proceedings to make that a solid situation we cannot go back on is very helpful Having said that, we need to stress that the deficit is a UK problem. Remarks by leaders in the Scottish nationalist field both during the campaign and since seem to indicate that Scotland will be exempt from the cuts that will be necessary if we are to cure this United Kingdom problem. Indeed, one gets the impression that it will be a case of having austerity in England but not in Scotland. We must face up to the fact that Scotland is already in a privileged position. The Smith commission report would seek to maintain the present balance. We have to look again at the Barnett formula and we should not rule that out. Indeed, the great Lord Barnett himself—greatly missed—felt that it needed to be changed. Therefore, I hope that we can take some action as far as that is concerned Finally, I turn to the question of the European referendum and the remarks made in the Queen’s Speech, which says that the Government will, "pursue reform of the European Union for the benefit of all member states" There is a whole series of issues, not least freedom of movement, on which clearly the Prime Minister will need to negotiate. The crucial thing is that we must take a lead, as the Queen’s Speech says, in the interests of Europe. We must face the fact that the present structure of Europe, dependent as it is on the eurozone, is fundamentally flawed We should be taking a lead in planning for a situation where if a country has to leave the eurozone, it can still remain in Europe—that is very important—but also that there is a planned process of exit. I believe fundamentally that there is no prospect of the Greek economy becoming competitive at the present exchange rate. Indeed, this view is shared by a number of others, including Alan Greenspan in the United States. We ought to press the European Union to make sure that there is an escape mechanism for countries that are not going to be competitive. We cannot have a situation where they go on being bailed out for ever and the European economy as a whole, and particularly our own, is adversely affected as a result.