The Economy

Part of the debate – in the House of Commons at 2:27 pm on 24th October 2019.

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Photo of Edward Davey Edward Davey Liberal Democrat Spokesperson (Treasury), Deputy Leader, Liberal Democrats 2:27 pm, 24th October 2019

It is a pleasure to follow Harriett Baldwin, who I voted for yesterday.

Rarely before in our history have a Government presented a Queen’s Speech that will do so much damage to our economy. By placing Brexit at its heart, the Prime Minister is delivering on one promise: his crude, four-letter pledge to business. This hardest of hard Brexits is as bad as it could get, save for a no-deal Brexit. The Conservatives once claimed to be the party of business, but they can never make that claim again. Let us just go through the basic economics. Reducing access to our closest international markets is highly damaging. Tearing up our membership of the EU’s customs union and single market, the best trade deal this country has ever had, is very destructive. Exiting our country from the multiple external trade deals that the EU has achieved is simply dreadful. Then we add the red tape that our exporters will be tied up in, at a cost to the private sector of at least a whopping £7.5 billion a year.

The Conservative’s central policy of the Queen’s Speech not only harms our economy, but will plunge our public finances into crisis. Regrettably, we do not yet have an official estimate of the red ink that this hard Brexit deal will pour over Britain’s finances but, as Lilian Greenwood said earlier, a report by UK in a Changing Europe estimates a cost to the Exchequer of between £16 billion and £48 billion a year, and a cumulative hit to borrowing of nearly £100 billion. This Government are sowing the seeds of a new austerity—a Brexit austerity, and a totally avoidable austerity.

If this Conservative Government are economically illiterate and fiscally incontinent, Labour’s shadow Chancellor is doing his best to give them cover. Take Labour’s plans to renationalise water, railways, energy and the Royal Mail. What is the cost—£100 billion, or perhaps £150 billion? Whatever the cost, it would be a calamitous waste of money. Of course there are problems with aspects of how our utilities have been operating, but there are positives, too. Just as we can fix the problems in Europe without the cost of the Conservatives’ ideological Brexit, we can fix the problems in these utilities without Labour’s costly ideology.

Take energy, for example. With the climate emergency, we must accelerate the pace of decarbonising energy, but instead Labour wants to spend years legislating for energy renationalisation—what a climate catastrophe! Liberal Democrats showed in government that if we intervene intelligently, we can harness the market to tackle climate change. Thanks to our decisions, Britain is now the global leader in offshore wind. Offshore wind farms now have much greater UK content than people ever imagined possible, and future offshore wind farms will no longer need a subsidy to be built. So if you want to go green, don’t go red, go yellow—and don’t destroy capitalism; decarbonise it.

It is this practical, business-like approach that goes through all Liberal Democrat economic policies. We start with a positive belief in markets, trade and competition, and we believe that responsible capitalism is possible. Liberal Democrats want to celebrate responsible business, and our policy of remaining in the EU is phenomenally popular with responsible business. It gives us a remain bonus to invest in our public services and our economy, to make them fairer and to equip them for the future.

On the likely eve of a general election, the voters are faced with a choice between two visions of the past and one vision of the future. In the blue corner, we have a return to the 1870s, in a colonial-style global Britain so well personified by the laid-back Leader of the House. In the red corner, we have a return to the 1970s, stoking up old class divisions when our country so desperately needs to come together. Fortunately there is a yellow corner, from where we can go forward to the 2070s, full of hope and optimism that our country can survive this current nightmare, invest in our children and tackle climate change. As we vote against this damaging Queen’s Speech tonight and prepare to face the electorate—preferably in a referendum but, if not, in a general election —the voters can be in no doubt: the Liberal Democrats are the party for Britain’s future.