Brexit: Economic Effect

Debate between Lord Bates and Lord Cunningham of Felling

Thursday 18th October 2018 Lords Chamber

[Lord Bates]

My noble friend raises an interesting point. When we look at the actual economic data rather than the forecast, we see: unemployment falling to record low levels; inflation and the deficit on the way down; employment on the way up; wage increases at their highest level for a decade; and exports increasing. All this points to the fact that, as with all forecasts, these are not targets to be met but something to be beaten.

[Lord Cunningham of Felling (Lab)]

My Lords, is it not the case, and does not the record show, that the north-east of England was one of the largest beneficiaries of Japanese inward investment exactly because the Japanese wanted to be in the UK because the UK was a member of the European Union? We know from statements by the Japanese ambassador and Japanese industrialists that decisions about investment in the UK have now been put on hold. Does the Minister anticipate that, whatever the decision and outcome of the negotiations, Japanese inward investment in the UK will continue as before as though nothing had changed?

[Lord Bates]

Certainly the evidence, though not specifically on Japanese inward investment, is that inward investment has been rising since 2015. I know how crucially important inward investment and exports are to the north-east of England. Those of us from that region were immensely proud to be one of the only net-exporting regions of the country. It is a very important element, but exports are continuing to rise and foreign direct investment is continuing to be made into the United Kingdom, up some 16% since 2015. We believe it is in both our EU friends’ interests and, of course, our own that there is a proper deal so that this can continue and unemployment in the north-east can continue to fall.

European Investment Bank

Debate between Lord Bates and Lord Cunningham of Felling

Tuesday 31st October 2017 Lords Chamber

[Lord Bates]

That is right. In fact, the Chancellor of the Exchequer met the chair of the north-east local enterprise partnership on his visit to Gateshead on 22 September. As a governor of the bank, he has been at the forefront, advocating a speeding up in recognising the equal rights of UK borrowers, which must be respected and must continue.

[Lord Cunningham of Felling (Lab)]

My Lords, is it not clear from the record that the European Investment Bank has invested, and encouraged further investment of, billions of pounds in the United Kingdom economy? If the Government decide that we will leave the EIB, what will they do to replace that level of continuous investment, particularly in the regions of England and the nations of the United Kingdom?

[Lord Bates]

One example is the northern powerhouse fund, in partnership with the EIB, but the British Business Bank is there for precisely that purpose, as are the UK guarantees. As the Chancellor said in his Mansion House speech, we still want to explore, as part of the exiting the European Union negotiations, the possibility of our remaining part of the EIB, for the very reason the noble Lord articulates.

Public Sector Pay Cap

Debate between Lord Bates and Lord Cunningham of Felling

Wednesday 5th July 2017 Lords Chamber

[Lord Bates]

I am not sure that I agree with my noble friend in that respect because the way that we have raised tax thresholds, particularly for lower-paid workers, has meant that on average they have benefited by an additional £1,005, which is a significant increase to their salary. Further, there is the increase in the living wage, with the equivalent of a 4.2% increase for the lowest paid. Therefore, I think there are other mechanisms by which we can ensure that people’s pay and conditions improve without resorting to raising taxes.

[Lord Cunningham of Felling (Lab)]

My Lords, is it sensible for the Government to continue to put their faith in growth in the economy when today’s abysmal news about productivity demonstrates that it is bound to fail? Our productivity now is lower than it was a decade ago.

[Lord Bates]

That is why we have said that productivity is a key target. But just last year we had the fastest-growing economy in the G7. We have seen incredible growth, otherwise we would not have employment at record levels in this country, with an additional 3 million people in work. Part of the reason is because we have kept a tight grip on the public finances and have seen the deficit reduced by two-thirds. These are important contributions towards maintaining confidence in the economy going forward. However, I accept that we need to work much harder on the area of productivity.