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Budget Resolutions - Amendment of the Law

Part of the debate – in the House of Commons at 9:44 pm on 13th March 2017.

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Photo of Geraint Davies Geraint Davies Parliamentary Assembly of the Council of Europe (Substitute Member) 9:44 pm, 13th March 2017

That excellent speech by my hon. Friend Clive Lewis was certainly much more entertaining than the after-Budget speech we heard from the blond Bullingdon bombshell, who told of his experience selling Toblerone, whisky and boomerangs, after an apprenticeship in selling pork pies to the British public over Brexit. Hon. Members will remember that he promised us £350 million a week for the NHS, though it has not materialised in the Chancellor’s Budget—or, should I say, fudge-it?

Since 23 June, there has of course been a 15% reduction in the size of the economy due to the devaluation of the pound, which is reflected in asset values and people’s wages. Our economy has shifted from the fifth to the sixth largest. We are about to hurtle forward with triggering article 50, giving all the power to determine what happens to the EU 27, without us having a vote in the House. They will impose tariffs. We send 43% of our exports to the EU, and 7% of their exports come to us; we are much more reliant on them than they are on us. Only two countries—the Netherlands and Germany—have a net export surplus with us; the others have an interest in imposing tariffs and making sure that it is not worth while for others to leave the EU, so things do not look too good.

I have spoken to the CBI, particularly in Wales, and it is worried about what is happening to cars—and not just Vauxhall, and Ford in Bridgend; there are other problems: Nissan wants under-the-table deals, and we have seen Rolls-Royce devalued by €4 billion, thanks to the revaluation of the pound. Our second biggest export is chemicals; we are told that 20% of chemical manufacturers are relocating to Ireland, or at least thinking of doing so.

We are told that if we lose trade with the EU, we can go to the emerging markets. Of course, those markets want to trade market access for migration and visas, in the same way that there is a trade-off with the EU between migration and intervention, so there is no obvious net benefit. Donald Trump said on his inauguration that countries are ravaging his economy, taking his jobs, selling his products, and stealing his companies, and he will not have a deal that does not give a net benefit to the United States, so things are not looking too good there.

As for Swansea West, which I represent, there was no news about the Swansea bay lagoon. There was no money for the city deal. There was no bringing forward of rail electrification; it is going to Cardiff in 2018, but it will not arrive in Swansea until 2024. Overall, in Wales, 70% of exports go to the EU, compared to 43% from the UK, so people are naturally concerned. We are told that the economy has grown by 2%, but that has been fuelled by consumer borrowing, which is unsustainable. We know that inflation will grow, which will further undermine people’s wages. Debt has risen from 45% of GDP under Labour to 90% under the Tories. What a failure! If we look at the Red Book, productivity has been flatlining since 2010.

John Maynard Keynes famously said:

“When the facts change, I change my mind. What do you do, sir?”

The vote for Brexit was predicated on more money, market access and less migration. All that is cast into question. We in this place, regardless of the votes earlier today, will have to look again at the situation that arises, and my prediction is that the British public will rise up against market failure, economic failure by the Government, and their decisions.