Andrea Leadsom: Fears of a disaster for sterling have not been proven correct

Posted On: 
7th July 2016

Andrea Leadsom this morning insisted that predictions of a "disaster" for the pound after a Leave vote have “not been proven correct”.

Andrea Leadsom speaking in Westminster this morning
Credit: 
PA

The Tory leadership hopeful also claimed a weaker pound was “good for our economy” because it helped exporters and encouraged inward investment.

Speaking ahead of the second round of voting for the Conservative leadership, Ms Leadsom set out a relentlessly optimistic vision of a post-Brexit Britain, insisting the UK could continue with tariff-free trade with the EU, while also controlling immigration.

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She also renewed her attack on Theresa May over the status of EU nationals, insisting that anyone legally in the UK would be free to stay.

She, Ms May and Michael Gove are on the ballot of Tory MPs later today, with two of the trio going forward to a vote of the party membership.

The Home Secretary scored a massive victory in the first round, meaning her place in the final two is all but assured, while Ms Leadsom and Mr Gove will battle for second place.

ECONOMY

Addressing supporters in central London, Ms Leadsom sounded dismissive of the economic impacts of the Leave vote, which have seen the pound fall to its lowest level against the dollar since the 1980s.

The construction industry has also taken a hammering, while there are also concerns about banks moving jobs out of the City of London.

But Ms Leadsom insisted there was no cause for pessimism, saying:

“Already we can see that the forecast of a disaster for sterling, for equities and for interest rates have not been proven correct. The pound is weaker, partly as the result of the markets being wrong on the result of the referendum and partly on the expectation of interest rate easing.

“Lower sterling is good for exports and it makes inward investment more attractive, it means we may import less and buy more at home, all good things for our economy.

“The FTSE 100 is trading higher and outperforming other global stock market indices.

“The government cost of borrowing has dropped, with private sector loans still available at the same rates as before – that means the price of our state borrowing has fallen by a remarkable 40%, with 10-year interest rates below 0.8% vs 1.37% on 23 June.”

MIGRATION

While much of the discussion since the 23 June vote has focused on the trade-off between free movement and access to the single market, the Energy minister insisted the UK could both control immigration and maintain full access to the single market.

“Trade must be the top priority - continued tariff-free trade with the EU, continued free trade with those countries we have agreements with as a current member of the EU and, vitally, seizing the opportunities to take up now free trade agreements with fast-growing economies around the world…

“And we want certainty for those who want to travel, to study and to collaborate with others on the continent and I say to them you will be absolutely free to do so.”

Ms Leadsom also lambasted Ms May over her failure to guarantee that EU nationals currently in the UK will be able to remain here.

“We want fair but controlled immigration. Fair to those already here and fair to all the talents across the world. So I tell you today I will not use people’s lives as bargaining chips in some negotiation.

“People need certainty and they will get it. I say to all who are legally here that you will be welcome to stay.”