The speech made by Julie Smith, Baroness Smith of Newnham, in the House of Lords on 10 October 2022.
My Lords, I have not been watching British politics and economics for quite the 60 years that the noble Baroness, Lady Blackstone, referred to. My first memory of the British economy was during the three-day week in the early 1970s and its periodic blackouts. My father and I visited my great-uncle, who had a corner shop; I would have been about three or four, but even then I can remember him talking about the difficulties of getting in produce, as supermarkets found it so much easier to undercut. There were changes in the economy then that were not necessarily attractive; they were not necessarily times we would want to go back to. The 1970s were probably the worst time for the British economy that I and many others remember.
When we voted for Brexit, despite the Project Fear perhaps put out by some, I did not expect that we would indeed end up in a period where there would be threats of blackouts and growth would be slipping back as much as it is.
Lord Forsyth of Drumlean (Con)
It has nothing to do with Brexit.
Baroness Smith of Newnham (LD)
The noble Lord says from a sedentary position that it has nothing to do with Brexit—
Baroness Jones of Moulsecoomb (GP)
Of course it does.
Baroness Smith of Newnham (LD)
I thank the noble Baroness. There was a suggestion by those who were arguing against Brexit that it would have catastrophic economic consequences. We will never know fully what the implications of Brexit would have been had it not been for the Covid pandemic and a whole range of other issues, but it is absolutely clear that we are in an economic situation that was unforeseen five years ago and which very clearly started at the time of Covid and was exacerbated by the war in Ukraine.
Had I not been heckled from a sedentary position, I was going to say that today a miracle has happened—I agreed with the noble Lord, Lord Lilley. Before the Whips in my party get too worried, I say that it is over something with which I hope perhaps all Members in your Lordships’ House can agree: that we should not want a Government to fail. It must be of considerable interest to us all, as citizens of the United Kingdom and Members of your Lordships’ House, that our country should be respected globally and that our economy should be as strong as possible. I therefore do not seek to talk down the Government, however much I might like to see them defeated at the next election.
The noble Lord, Lord Eatwell, raised the question of whether the Prime Minister had too many Ps in her PPE. I was more concerned that she had missed Politics 101: as Prime Minister, there are certain people you want to have in your Cabinet, so do not kick to the Back Benches those people who do not agree with you. The Prime Minister might like to rethink that a little bit. But did she really learn the lessons in Oxford PPE that some of the rest of us did? There seem to have been so many decisions in the last four weeks that are not about strengthening the economy; some of them stand to weaken the economy.
The noble Lord, Lord Forsyth, is right that cheap money is no longer available, but those decisions that the Chancellor put forward two and a half weeks ago led to a set of consequences that is going to increase borrowing. Can the noble Lord, Lord Callanan, in his response tell the House what calculations the Government have made around the impact on the economy and our borrowing of the Government’s mini-Budget; the amount of borrowing the Government are having to do; the intervention of the Bank of England; and the long-term consequences this will have on young people and their mortgages, and on those who are repaying their student loans? The youngest are among those who are going to suffer most from many of these changes.
Cutting energy prices is right. Borrowing for tax cuts most certainly was not.