Middle East: Economic Response

Lord Mackinlay of Richborough Excerpts

Monday 1st June 2026 Lords Chamber

[Lord Livermore (Lab)]

I am grateful to the right reverend Prelate. As he will know, the Government set out their plans for the aid budget in the last spending review. He is absolutely right that the conflict in the Middle East poses very significant challenges to the world economy and to many of the people in the region and beyond. We do not yet know what the full impact of the conflict will be; that will depend on its severity and duration. Likewise, the Government have been very clear that this war is a mistake that will bring significant extra costs to bear, not only on the British people but on people right around the world, as the right reverend Prelate said.

[Lord Mackinlay of Richborough (Con)]

My Lords, it must be noted that the Government are enjoying and using many of the Brexit dividends that were given to them: that is zero tariffs on anything they please; that is using subsidy—not a mechanism I particularly promote—in various places, notably, in the exchange here this afternoon, on Stoke-on-Trent’s ceramic industry; and the Government are able to do whatever they wish, in whichever field they wish, to promote economic growth. We see that also in the gracious Speech with the potential nationalisation of steel. Can the Minister give some sort of answer to the House as to whether he agrees with some of the Cabinet who wish to see the UK re-enter the single market and a customs union, which would stop most of those economic measures that are currently in the hands of the Government at a stroke? Does he agree with that? Is he at all concerned with the EU reset, which will have many of the same restrictions?

[Lord Livermore (Lab)]

It really does take a Brexit zealot to say that. Cutting tariffs may gain us 0.001% of GDP whereas Brexit itself has cost us a minimum of 4% of GDP, although estimates now say that it ranges from 6% to 8%. We are seeking to mitigate at the margins the huge damage done to the UK economy by Brexit, so the idea that this is some kind of Brexit benefit is absurd. Should we in due course re-enter the European Union? My personal view is that that is an inevitability: of course the UK will at one point re-enter the EU because that is absolutely in our national economic interest. In the meantime we are doing the European reset, and that is incredibly important in helping growth in our economy.