Covid-19: Economy

Lord Shipley Excerpts

Thursday 4th June 2020 Lords Chamber

[Lord Shipley (LD)]

My Lords, it was reported yesterday that the US economy will take 10 years to recover from the pandemic—that is according to US government analysts. We know that something similar is likely for the UK. Our economy is in a state of shock, and it is estimated that Covid-19 could reduce GDP by well over 10%. To make matters worse, the Government seem intent on risking a no-deal Brexit, which could result in a further 5% long-term reduction in the UK’s GDP.

We are suffering from an acute lack of leadership as the Government pretend that they can solve both problems at the same time. They cannot. It is dangerous to expect British companies trying to save and restore their businesses in the wake of the pandemic, which is not over, to cope with the additional complexities of a new trade agreement—or no agreement at all—which would need to be implemented at very short notice. The Government should request an extension to the 31 December transition period deadline.

On the impact of no deal, the Government should heed the warnings of Nissan, which is keen to continue car production in Sunderland. Its global chief operating officer said yesterday morning that if the company is

“not getting the current tariffs, the business will not be sustainable.”

That is what everybody has to understand. Can the Minister say whether the Government understand that?

We have learned a lot from the impact of the pandemic, not least that we are too reliant on global supply chains and need to be more self-sufficient. I am thinking of more local food production to reduce dependency on imports; the supply of energy, where major investment in renewables would boost the economy; and more local manufacturing in areas that have been traditionally been manufacturing centres. Achieving all this needs the Government to think in terms of places and how they can be helped to produce more.