Queen’s Speech — House of Lords, 2021-05-12
Topic: Macroeconomics
Edward Timothy Razzall (Liberal Democrats, Centre to centre-left): My Lords, it is no surprise that there are a number of key omissions from the gracious Speech. We all have our favourites. First, where are the detailed proposals to level up? The Tories won the election in 2019 and did well last week because the electorate believed that they had a plan to turn this slogan into action. Why do we have to wait until later this year to discover what that plan is Secondly, as other Members have said, why have the Government’s proposals for social care been reduced to one sentence "Proposals on social care … will be brought forward", the speech says. We have been many times through the history of the majority Tory Government since 2015, ducking the implementation of the Dilnot recommendations from 2009. As other speakers reminded us, the Prime Minister said in 2019 that he had a detailed plan for social care. Where is it? Is it that he is frightened by the reaction to Theresa May’s proposals in the 2017 election campaign Thirdly, there is no reference to what steps will be taken to ameliorate the effect of Brexit. Where are the sunlit uplands promised in the referendum campaign? Both the Bank of England and the OBR expect negative long-term effects on the UK economy from the trade deal signed with the EU; the Bank estimates that, in the long term, UK trade will be 10.5% lower and GDP and productivity 3.25% lower than with frictionless trade. Of course, it is SMEs who are the worst hit I have given examples in the past of businesses seriously damaged by the effect of the trade deal, such as the SME selling second-hand combine harvesters, which has to pay inspectors to produce complex certificates for the machines, causing significant cost and delay. There is also the bike manufacturer struggling to cope with different VAT regimes across 27 countries; the Scotch whisky producers with labelling requirements that often require small companies to set up a distribution company in Europe, significantly reducing profit; and the Nottingham company—it makes synthetic hairpieces for cancer patients—whose essential just-in-time supply chain in Germany has now collapsed. These examples are not indicative of the teething troubles that the Government talk about. They are examples of real damage that Brexit has done to many SMEs without any apparent economic advantage As the noble Lord, Lord Bridges, told us, the major omission from the gracious Speech is any reference to a credible fiscal framework to ensure the smooth reduction of the gigantic government debt, now in excess of £2 trillion, albeit with a significant proportion held by the Bank of England. A recent report from the National Institute of Economic and Social Research, funded by the Nuffield Foundation, with participation from the noble Lord, Lord Lamont, and Lord Darling, has five key recommendations. First, the date of fiscal events such as the Budget should be fixed well in advance, not decided on the whim of the Government, and should be subject to greater parliamentary scrutiny. Secondly, the OBR should publish reports ahead of these events, addressing key issues and numbers, not just giving them privately to the Treasury. Thirdly, the Chancellor should outline fundamental fiscal choices under different scenarios to be assessed by the OBR—