Economy and Finance

Lord Suri Excerpts

Thursday 9th June 2016 Lords Chamber

[Lord Suri (Con)]

I thank the noble Lord, Lord Haskel, for securing the time for this debate. It is an extremely pertinent debate given that we will in two weeks be able to choose whether to guarantee our financial and economic prospects or endanger the flow of trade to and from the single market, which accounts for some 10% of our GDP.

Already we can observe the outflow of money from British assets. Some £65 billion either left the UK or was converted into other currencies in March and April. This is the fastest rate since the financial crisis in early 2009. Alternatively, we could look at it as £1.3 million a minute leaching out.

I am disappointed to see the populists of the leave campaign start to turn the polls around. It is notable to see the pound drop more and more as they gain in the polls. People need to understand that this means higher prices in the shops and, if we pull out of Europe, import tariffs. For my business and all the people we employ this will be utterly disastrous. Jobs will be lost and I and others will find it harder to attract the investment that drives so much of our growth.

The sheer foolishness of cutting our trade links with the body that receives just under half of all our trade is extreme. I do not know if we will be trading on Norwegian terms or Turkish terms or Canadian terms. I think that one of the Ministers leading the campaign even suggested that we use Albanian terms. This is the single biggest risk to the economic prospects of the UK. Every single reputable body, from the Treasury to the IFS, from the OECD to our allies, has told us to stay in.

We would be voting for permanently lower growth, higher prices, diminished living standards and a recession. Being in Europe does not act as a muffler; it is a loudspeaker. It is one of the most important international institutions in which we can make our voice heard. Simply, to secure our economic future, we must stay in Europe.

There is another issue which has been somewhat lost in the din of this campaign and will no doubt emerge once the debris has settled. Infrastructure is of critical importance to our future economic growth. I welcomed the decisive moves by the Government earlier in the year to roll out superfast broadband. Physical infrastructure still plays a significant role in the ability of businesses to scale up and sell goods to other nations.

Since I arrived in this country, there has been the perennial blight of airport capacity in the south of England. I, like many others in this and the other place, have seen numerous signs and adverts for Heathrow or Gatwick expansion. The arguments are finely balanced and I will admit that I have been swayed by the warnings of ground-level pollution in west London should Heathrow expand. Noise is also an issue, but ultimately we must weigh up the decision and balance it against the undoubted boost to productivity and growth that it will bring.

My message to the Government is simple: expand one airport or the other, or both. The lack of capacity makes freighting goods overseas far more expensive and the tremendous crowding actually leads to more noise as jumbo jets taxi around the metropolis. Also, we are seeing other hub airports eat our lunch. Amsterdam has captured large swathes of commercial flights, especially on routes that were not in demand a decade ago, such as to Lagos or Manila. Unless the Ministers responsible are capable of screwing up their courage, the UK will continue to be denied growth and transport opportunities for those goods that cannot be transported by sea or overland.

The other pressing infrastructure question concerns our rail capacity. Crossrail has recently been completed and is in my view a roaring success for British engineering, manufacturing, and of course tunnelling. The evidence of the Eddington report showed that the pressing issue of rail capacity was overcrowded commuter lines around big cities such as London, Bristol and Manchester. I still cannot see the case for spending £55 billion on a high-speed connective link when it makes more sense to invest money in higher-capacity and faster regional and metropolitan services. As with most big infrastructure projects, I can confidently predict that the figure will rise during construction.

Trimming half an hour off train trips from London to Manchester will not heal the north/south divide or boost growth in any meaningful sense. The London train will not even stop at a well-connected station due to the decision to make it stop at Euston instead of Old Oak Common. Reinvesting that budget in road improvements or regional train networks will yield fewer photoshoots but greater transport flexibility and capacity. Shorter commuting times around often badly connected suburbs in our big cities will boost productivity, which is where we can reap significant gains. I would urge the Department for Transport to rethink its strategy and redirect at least some investment into regional infrastructure rather than this expensive project.