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May I say to Mrs Main that, when she reflects on the referendum, she may want to reflect on why the 3.5 million people who will be most affected by that referendum were not actually allowed to take part in it and whether the will of the people therefore reflected the full will of the people in the country?
A debate on the place of Britain in the world cannot happen without considering the impact that Brexit will have on the UK economy. As a country, our place in the world will be greatly affected by whether we are weaker, poorer and more isolated following Brexit than we would otherwise have been. The Secretary of State for International Development would I am sure, had he been here now, have accused me of being negative. I suggest that his positivity often merges into delusion about all the benefits he claims he can see from Brexit. I want to focus on that.
It is certainly worth considering the forecasts that were made three years ago about where we would now be in relation to Brexit. I accept that some statements were made immediately before the vote by George Osborne and the Treasury that, frankly, I was not willing to go on TV and repeat because I thought they were outrageous. However, if we look at what has happened in the last three years and at the predictions made by the Bank of England, the Office for Budget Responsibility, private sector consensus and Economists for Brexit, asking which assessments or analyses hold up three years on, the one that is way out is of course the one made by Economists for Brexit. They predicted that the UK economy would have grown much more significantly than was the case. That is why the predictions made by those different organisations are worth bearing in mind and worth considering when we are trying to work out where we might be should we end up with Brexit, particularly with the Brexit proposals that our Prime Minister has been touting.
In the joint statement in 2016, the Institute for Fiscal Studies, the Centre for Economic Performance and the National Institute of Economic and Social Research predicted that the impact of leaving the EU might leave the UK economy 8% smaller by 2030 than if we had voted to remain. They predicted that the economy would be between 1% and 3% smaller by 2020. It is a fact that the UK’s economy is 1.5% smaller now than was forecast by the Bank of England back in May 2016. So their predictions seem to be pretty much spot on. If they are correct, the UK economy will be 8% smaller by 2030 than had we stayed in the European Union.
So when we have a Secretary of State who promotes the so-called economic benefits of Brexit, it is rather disappointing that they do not actually fit with what the analyses suggest will happen. I agree with the point made by Chris Giles, an economist who writes in The Financial Times, who summarises the impact of Brexit, even with a deal, as follows:
“It is not empty shelves and huge job losses, but a slow drip of lost opportunities, activity moved elsewhere and income disappointments. The correct analogy is Britain’s slow, 30-year, relative decline from victor in the second world war to the sick man of Europe, not the immediate pain of a recession or a financial crisis.”
Christian Schulz, the chief economist at Citi has worked out that
“The UK economy is already around £60 billion smaller than it would have been without a vote to leave the European Union”.
When people talk about figures on the side of a bus, perhaps the figure that they should bear in mind is a £60 billion loss to the value of the UK economy.
Other indicators are not exactly hunky-dory in the way that the Secretary of State indicated. So, yes, it is true that the number of jobs has increased, but it is also true that business investment is 20% lower, foreign direct investment is at a six-year low and there has been a 35% drop in manufacturing FDI. I tried to make that point to the Prime Minister, who was in receipt of a letter from five manufacturing sectors saying that his deal would cause them huge damage. When I explained that that was what they had written to him, for some reason he seemed to take that as an indication that I should support his deal. The key manufacturing sectors of aerospace, aviation, food and drink and chemicals have written to the Prime Minister saying that his deal will badly damage them, and he says that that is a reason to vote for his deal. Perhaps we was not listening or he did not understand what I said; I am not sure which of the two it is. All the other assessments, including the Government’s own, point to the Prime Minister’s deal leaving us between £2,000 and £2,500 worse off per capita every year.
The most optimistic scenario, even with no net contributions to the EU budget, is that we will be £16 billion worse off. That is why the only way out of this mess is for the decision to be put back to the people. Let us have a people’s vote, and then we can decide whether to proceed with what the Government want us to do or to stay in the European Union.