European Union (Withdrawal) (No. 5) Bill - Second Reading

Part of the debate – in the House of Lords at 9:01 pm on 4th April 2019.

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Photo of Lord Stern of Brentford Lord Stern of Brentford Crossbench 9:01 pm, 4th April 2019

My Lords, we need the protection provided by the Bill because the potential losses from a no-deal Brexit are so grave. I will not repeat what the House has heard many times about potential short-term disruption, which could indeed be very serious. I will not repeat what it has heard about security and Northern Ireland, although these things are very worrying. As an LSE professor and current president of the Royal Economic Society—though I do not speak tonight for those institutions—I emphasise and understand how threatening a no-deal Brexit would be to our universities and our research, which are among the UK’s greatest assets and comparative advantages.

My basic purpose tonight is to dispose, very quickly, of the fatuous argument that a no-deal Brexit would bring some medium-term sunny uplands. It is assertion without evidence; it is fantasy. Every serious study, by the IMF, the OECD, the Bank of England, Her Majesty’s Treasury, the National Institute of Economic and Social Research, some of my fine colleagues at the LSE, although not myself, the merchant banks JP Morgan and Goldman Sachs—I could go on—points to medium-term losses of 5% to 10% of GDP per annum; that is not tomorrow but in 10 to 15 years. That is £100 billion or £200 billion a year to this country, dwarfing the £10 billion net that we pay to the EU. Where do these calculations on losses come from? They come from rising trading barriers to our major partner and discouraged investment. They take account of possible reduced barriers elsewhere, but the suggestion that these could offset the other losses simply does not stack up. The results are consistent with the currency markets, with clear messages from business and with common sense. There is no pretence at precision here. We are simply understanding, from the serious work that has been done, that the medium-term costs from a no-deal Brexit look very serious.

The evidence for the argument of the medium-term sunny uplands is simply not there. The argument is a tissue of confusions, yet we have heard it today in your Lordships’ House. It cannot be taken seriously by those who take evidence seriously. The risk of a no-deal Brexit is grave in the short, medium and long run: that is why we need the protection afforded by this Bill.