Business, Energy and Industrial Strategy Committee
Debate between Rachel Reeves and Helen Goodman
Rachel Reeves
I can say to my hon. Friend—who sat in on the evidence sessions with me—that there are a number of issues, which I hope I put across in my statement. Some medicines lose their benefit quickly, and if there are big delays at the border, they will not have the effect that they would have had if they had reached patients quickly. That is one risk. Another is tariffs, which could also be a huge issue. Although WTO rules specify that medicines are tariff-free, they have not been updated for eight years, so many medicines are not included. Currently, medicines that are tested in any country in the European Union can then be accessed in the UK, but that may not be the case after we leave the European Union. For those three reasons, I think that there is a risk to patients from a hard Brexit, at least, or from a no-deal scenario.
Helen Goodman (Bishop Auckland) (Lab)
A few months ago, GSK’s chairman told me that the one-off cost of preparation for Brexit would be £70 million and the ongoing costs would be £50 million a year. Today the GSK plant in Barnard Castle is announcing a restructuring programme to cut costs, which will mean the loss of dozens of jobs. Does my hon. Friend agree that it is far more important to have regulatory alignment in the interests of jobs in modern manufacturing than to maintain the Prime Minister’s doomed attempt at unity with extreme hard-right Brexiteers?
Rachel Reeves
I can sense my hon. Friend’s frustration that jobs will be lost in her constituency because of the risks of Brexit. GSK has made it very clear that Brexit will cost it a lot of money. If it is testing its drugs in the UK, it may no longer have access to European markets, because those drugs will not be recognised unless they are tested in mainland Europe. That is creating new costs, as GSK is having to set up new testing facilities in the rest of Europe. If there are cost increases, it will seek to cut costs elsewhere, and the consequences of that will be borne by my hon. Friend’s constituents in Bishop Auckland and also by patients in the UK as a whole who may not have access to the drugs. As far as I can see, leaving the European Union will have no benefits for the pharmaceutical sector, or—but most important—for patients.
Customs and Borders
Debate between Rachel Reeves and Helen Goodman(6 years, 6 months ago)
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Rachel Reeves
The hon. Gentleman and I have a long history, as we fought the Bromley and Chislehurst by-election against each other in 2006. Today, however, I cannot find a word on which I disagree with him; he is absolutely right. The work of his Select Committee and so many others mean that we can bring this evidence to the fore, and raise the concerns of businesses, the people who work in them and the trade unions in all our constituencies. That is why the work of Select Committees is so important, and it is also why this debate, which was called by my right hon. Friend the Member for Normanton, Pontefract and Castleford (Yvette Cooper), is so important.
I will now touch on a few pieces of evidence given to the Business, Energy and Industrial Strategy Committee that really bring home what we are talking about, especially regarding the effects of which we are fearful. Honda, which produces cars in Swindon, said that just a 15-minute delay at the border would cost it £850,000 a year. If hon. Members multiply that by the number of minutes or hours for which goods and components might be delayed, and multiply that across the number of car and component manufacturers in the country, they will get a feel for the sort of impact that we are talking about. It is estimated that Ford would have to fill in 115,000 import declarations at a cost of £35 per declaration for imports from the European Union, resulting in a total cost of £4 million, as well as the additional administrative costs.
Rachel Reeves
I will just make a little bit of progress.
Diageo uses 11% of Ireland’s cream output every year in the production of Baileys. That is quite a staggering statistic. Some 18,000 trucks cross the border between the Republic of Ireland and Northern Ireland every year in the production of Baileys. Diageo estimates that delays at the border would cost it £1.3 million a year, and even greater costs in the supporting supply chains. It went on to say that even small hold-ups to the process would be a huge problem.
Both Nestlé and Honda said in evidence to us that companies produce for the market that they are supplying to. Therefore, even if we did secure free trade agreements with Asian and American countries, and others, we would not see a huge increase in jobs and investment here, at least in the sectors that we looked at. Ferrero Rocher told us that 5,000 trucks a year go between the UK and the rest of the European Union. It talked about costly delays and the effect on the freshness of its goods. Businesses said that border delays would be very expensive. Leaving the customs union, they told us, was about damage limitation rather than seeing and forging new opportunities ahead.
My own view is based on the evidence that the Committee has taken, which leads me to a very simple conclusion: we need to remain in a customs union to retain the benefits of frictionless trade that we enjoy today for the good of jobs and investment in our country.
Budget Resolutions
Debate between Rachel Reeves and Helen Goodman(6 years, 11 months ago)
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Rachel Reeves
I am not making my own forecasts; I am taking those of the Office for Budget Responsibility. What people in St Albans, Mid Bedfordshire and Leeds West want is affordable housing and the ability to get on to the housing ladder, and that requires stable house prices and an increase in housing supply. According to the OBR, however, there will be no improvement in supply on the basis of the measures announced today, and house prices will be 0.3% higher than they would otherwise have been, so the measures will not have the desired effect. I understand that the hon. Lady wants her constituents to have those opportunities, but it does not sound as though her Chancellor’s Budget will enable them to do so. In fact, I think it will have the opposite effect.
Rachel Reeves
I will make a little more progress, if that is okay.
On page 128 of its document, the OBR says that after the stamp duty changes, on the basis of its analysis, prices paid by first-time buyers will be higher with the relief than without it. Thus, it argues, the main gainers from the policy will be people who already own their properties, not first-time buyers. That is a terrible indictment of these housing policies. If that was supposed to be the Budget’s fanfare announcement, I am afraid that it has ended up being a bit of a damp squib.
Helen Goodman
Does my hon. Friend agree that it is absurd to have a stamp duty limit for first-time buyers of £500,000, which implies they have an income of £150,000?
Rachel Reeves
Yes. The OBR’s earnings forecast shows that that is another impediment to many people getting on the housing ladder. Incomes need to keep pace with the rising cost of living, especially house prices, but the average earnings forecast suggests that it will be harder still for many people to get on the housing ladder.