Leaving the Eu: Economic Impact of Proposed Deal

Part of the debate – in the House of Commons at 12:44 pm on 20th February 2019.

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Photo of Jonathan Reynolds Jonathan Reynolds Shadow Economic Secretary (Treasury) 12:44 pm, 20th February 2019

For more than two years, businesses and trade unions have called for clarity about the Government’s Brexit deal, and for two years there has been nothing but delay and a total lack of clarity. What has been clear from the wide range of independent analyses that we have received is that the Government’s Brexit deal is not good news for our economy. Even the Government’s own modelling said that the economy would be nearly 4% smaller if the Government’s deal was agreed, equivalent to £83 billion if it happened today. It is no surprise that the Prime Minister’s deal has struggled to command any widespread support, leading to the largest ever defeat in the House of Commons.

The climate of uncertainty created by the Government’s Brexit blundering, particularly their refusal to take no deal of the table, led first to businesses delaying investment decisions. Now, decisions are being taken, but as a result of the uncertainty and insecurity created by the Government, those decisions are to cut investment and jobs. The result, as the Governor of the Bank of England, Mark Carney, told us this month, is that business investment in 2018 fell by 3.7% in year-on-year terms.

Let us go through some of those decisions. Jaguar Land Rover has cut 4,500 jobs, Ford cut 1,000 jobs in Bridgend and Honda’s Swindon closure, supposedly not related to Brexit, will mean that 3,500 will lose their employment. In financial services, HSBC has announced that it will move seven offices from London to Paris in 2019. Deutsche Bank has said that it is considering moving 75% of its balance sheet from London to Frankfurt.

This is not just about Brexit. It is about how the Government have failed to produce an economic plan that tackles our productivity crisis and increases investment for the long term. They are a Government putting our economy at risk through failed economic management and failing to secure a Brexit deal that would protect jobs and the economy.

May I ask the Financial Secretary first, what happened to the promise of frictionless trade? Secondly, where is the detail businesses need about the promised customs arrangements? Thirdly, can the Government tell us what mysterious technology will facilitate their proposed customs arrangements? Fourthly, why have the Government failed even to mention the issue of intellectual property protections in the future partnership agreement? Finally, will the Government confirm that there has been a dilution of protections from road hauliers and passenger transport operators since the earlier Chequers commitments?

It is the role of the Government’s Treasury team, above all others, to stand up to protect our economy. It is as though the Chancellor has simply gone missing. The Government have run out of time. We cannot wait any longer for the answers we need and the country cannot wait any longer for the answers it deserves.