The speech made by John Shipley, Baron Shipley, in the House of Lords on 10 October 2022.
My Lords, two crucial matters relating to growth were missing in the Minister’s introductory speech. I was surprised, because she said we must get the economy growing again—I think the whole House would agree with that sentiment—but there was absolutely no admission of, first, the impact of Brexit, which, as a number of noble Lords have pointed out, has damaged the country’s growth prospects. Will the Government admit that the forecast by the National Institute of Economic and Social Research that the reduction in GDP as a consequence of Brexit will lie between 4% and 5.5% is correct? It clearly matters in relation to growth.
The second issue, immigration, has been raised by a handful of noble Lords, but in particular my noble friend Lord Fox. Do the Government have an immigration policy? I ask because a major difference of opinion is clearly emerging between the Prime Minister and the Home Secretary. This matter needs to be explained. As the noble Lord, Lord Birt, said, there is a huge need for a bigger labour force in agriculture and a number of other industries, but what is the Government’s policy in relation to that, and to the number of students? I understand that we have record numbers of international students in the United Kingdom, which I welcome. This is a good thing, but they clearly count as part of the immigration numbers. Who is in charge of immigration policy? The problem we have is a problem now, while we address the skills deficit and the lack of productivity we have suffered from in recent years.
I look forward to the Minister’s reply on both those matters, but I will say this on the growth plan: you do not drive growth by making poor people poorer, by making rich people richer or with huge unfunded tax cuts. You do not drive growth by losing the confidence of the markets through a mini-Budget that was not subject to independent scrutiny, leading to the pound crashing, interest rates rising and a pensions crisis requiring £65 billion of emergency intervention. You do not drive growth by cutting corporation tax when it is investment incentives that drive growth, not the exact level of corporation tax.
The Prime Minister has called for “growth, growth, growth”, as though this is something only the libertarian right believes in, but good, clean, green growth is surely central to our future security. Yet achieving net zero seems of no interest or concern to the present Government. That is very worrying, because our country can grow as we deliver net zero.
The mini-Budget has worsened the cost of living crisis, particularly for aspiring home owners. From next year, the average mortgage bill on a new deal will increase by £1,500 a year on a £200,000 mortgage. We face major cuts in public spending. The Government have not said where these might fall—maybe we will find out on 31 October. The Government must drive fairness. We have heard of the number of children who will be pushed into poverty if benefits do not rise with inflation.
The Government have lots of proposals for which the detail is not yet clear. There are investment zones, very similar to enterprise zones, but what is the impact on those areas immediately outside them? Finally, what can the Government do to increase foreign direct investment, bearing in mind that it has increased 72% across the north of England in the last five years whereas in the rest of the country it has dropped?