Queen’s Speech

Baroness Buscombe Excerpts

Wednesday 12th May 2021 Lords Chamber

[Baroness Buscombe (Con) [V]]

My Lords, I wish to focus on two aspects of our economy—the costs of green energy and our financial settlement with Scotland. I reference both those issues following many months of government departments announcing extraordinary public spending commitments that lack context and detail. Indeed, there is increasing alarm among taxpayers that many of those commitments have been made in addition to the phenomenal public spending on tackling the virus. According to the Economist, the UK has a balance of payments deficit of 4.2% of GDP or some £85 billion. The gracious Speech hails yet more big government and more spend, spend, spend.

With regard to green energy, while there is overwhelming support for reducing carbon emissions, there is growing public concern that the excessive costs of new green targets will further increase the UK’s balance of payments deficit. That concern could be partially met if we bring onshore and build our own green industries and the related supply infrastructure and skills for the longer term. Despite the UK having the most favourable conditions for wind-powered generation in Europe, as a result of our major investments to date, not one manufacturer of wind turbines and blades fully manufactures, rather than assembles, in the UK.

The vast majority of electric vehicles sold here are manufactured outside the UK, with the exception of the Nissan Leaf and the Mini Countryman SE. Even after £500 million of loan guarantees were provided to Jaguar Land Rover in 2019 to encourage the company to build electric vehicles in the Midlands, the company decided to postpone Midlands production and is still outsourcing production of the leading I-Pace to a Toronto-listed manufacturer in Austria.

That said, there are positive developments towards making electric vehicle batteries in the UK, and some promising electric commercial vehicle start-ups. So, rather than giving all our business orders for these green initiatives to foreign car companies that are mainly in Germany and France or wind turbine manufacturers based in Germany and Denmark, why not substantially increase public investment alongside private investment in the manufacturing, not just assembly, of all the wind turbines, batteries and electric vehicles we need for the UK market?

The gracious Speech references crucial initiatives to upskill our workforce. However, we must allow several years before we can reap the benefits for our manufacturing base. In the meantime, we lack a clear strategy for manufacturing in the UK that actually translates into increasing productivity, given that some 80% of our GDP is in services and we do not yet have a comprehensive financial services agreement with the EU. Unless we have this in place, we will cede further services jobs to the EU without ensuring enough value-added green jobs to offset this trend. Therefore, while some of our post-Brexit global trade agreements are, of course, welcome in the short term, what agreements are we putting in place now to improve our balance of payments? After all, if the Netherlands can have a balance of payments surplus, so should we.

Briefly, on Scotland, we will never buy the affection or respect of the SNP, yet each time there is a threat of a referendum for independence we give it more money and increased powers, which delivers greater political and economic advantage to Scotland. We did this following the last referendum—but why? This is no longer tenable, given that Scotland has been receiving around 130% per capita compared with England for years. Why, for example, do we continue to ignore the financial discrimination against English students studying in Scotland? Why do we not all move to Scotland for free social care? This gross imbalance has not gone unnoticed, given that it is now hard to find anyone beyond Westminster who supports the union with Scotland beyond our Armed Forces and shipbuilding presence. It is time to make it clear that if Scotland leaves the union it should be required to take on a share of the UK’s outstanding national debt, including state and public sector pensions on a per capita basis. The UK should also have security over Scottish Government assets in the event of a default—which is not unlikely given the scale of the deficits.

We can build back better if we focus on real economic growth through increased productivity, coupled with a fair apportionment of public expenditure across the UK.