The Economy

Adrian Bailey Excerpts

Thursday 24th October 2019 Commons Chamber

[Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)]

I would like to use the short time I have to focus on the issues of fiscal responsibility, public spending and public debt, which have been much debated in the Queen’s Speech, including by the Prime Minister and the Chancellor. I make it clear that I welcome the Government’s public spending commitments, which are long overdue. As they stand they are inadequate, but they are a step forward. However, what is significantly absent from the Queen’s Speech, and from any other pronouncement I have heard from either the Prime Minister or the Chancellor, is how they will be funded.

Will the Government’s public spending commitments be funded through economic growth? I doubt it. Last quarter, debatably, we were in recession. Even the most optimistic estimates reckon that we will be flatlining for months to come. Indeed, if we look at current investment in our manufacturing, which is so crucial to economic growth, the idea that we will fund them through economic growth is, quite frankly, fantasy.

What about taxes? The Government are placed to reduce taxes; they are not demonstrating how they are going to increase them, so no information there. The fact is that the only alternative has to be borrowing and that is already looking pretty dicey. Even the current level of borrowing is an increase of 20% on the previous year. The deficit is currently projected to be in the region of £40 billion this year. That is expected to rise to a deficit of £50 billion-plus, with the £13 billion we are committed to spend next year.

In a moment, I will come on to talk about the impact of no deal and even the Government’s withdrawal agreement. This is incredibly worrying, because the Government have not indicated how we are going to fund all this. I welcome it, but it is potentially very damaging indeed.

The Government have not given any economic impact assessment of the withdrawal agreement. On the one hand, they tell us we have to decide within two days of debating, because we have had three and a half years of debate, but on the other hand they say, “We haven’t enough time to do an economic assessment.” Perhaps someone can square those particular arguments; I cannot. Happily, a number of organisations have done an assessment, and they have made it clear that under the withdrawal agreement, we will potentially be £50 billion a year out of pocket—£20 billion more than the Office for Budget Responsibility estimates. We are heading towards the sort of debt levels that were portrayed under Labour as a prelude to economic apocalypse. Indeed, this argument was rehearsed again by the Chancellor of the Exchequer. I would like to know why something that was portrayed 10 years ago in such a light should suddenly have morphed miraculously into a springboard for some sort of economic growth in the halcyon years that will come post Brexit. That does not make sense. The fact is that the Government were wrong in 2010 and they are wrong now. That is why I will vote against the Queen’s Speech.

Animal Welfare (Sentencing) Bill

Adrian Bailey Excerpts

2nd reading: House of Commons & Programme motion: House of Commons
Wednesday 10th July 2019 Commons Chamber

[David Rutley]

Once again, my hon. Friend speaks with authority on the subject, and he can be assured that we are working through all those details. I just want to underline that costs will be covered through the arrangements put in place.

As I was saying, dog fighting inflicts a high level of suffering on the animals involved. We believe that in such cases, where the level of cruelty and culpability is so high, a higher sentence is clearly justified, and I am sure that the House agrees.

The Bill is a simple measure, amounting to just two clauses, but with a very positive outcome. Clause 1 is the Bill’s main clause; it outlines the mode of trial and maximum penalty for certain animal welfare offences. As I previously outlined, under the Animal Welfare Act 2006 the maximum penalty in practice is currently six months and/or an unlimited fine. The clause changes the maximum custodial sentence available for five key offences: causing unnecessary suffering to a protected animal; carrying out a non-exempted mutilation; docking the tail of a dog, except where permitted; administering a poison to an animal; and involvement in an animal fight.

[Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)]

The Bill is hugely welcome. However, I am concerned about the narrowness of its scope, and my investigations have not been able to satisfy me that there are no potential areas of obscurity in it. Given that the Bill applies to domestic animals and not to wild animals, what is the situation in regard to, say, feral cats? Would somebody who did harm to their neighbour’s cat be subject to a different maximum sentence from somebody who did harm to a cat that was effectively feral and unattached?

[David Rutley]

We can talk about that in more detail in Committee, but it is clear that this is about animals that are under the control of man. So in a situation where a feral cat was under the control of a man or woman and was experiencing unnecessary harm, the Bill would apply.

Co-operative and Mutual Businesses

Adrian Bailey Excerpts

Thursday 27th June 2019 Commons Chamber

[Gareth Thomas]

I absolutely endorse my hon. Friend’s comments. I know that fisheries co-ops are another part of the sector in which she is interested. They, too, make a huge contribution, and could do a lot more with a little more help.

The economy is not some separate space to be run only by so-called management experts on grotesque levels of pay who can continue to ignore the rest of the country. Why should our neighbours, our friends and those we see at the school gate not have a say in how businesses and services on which they depend are run? They are allowed a say in political decision making, so why should they not be allowed a say in the businesses that they work in or depend on? Co-ops and mutuals can be life-changing and transformative, and the Government and the other Opposition parties should join Labour in committing themselves to double the size of the sector from between 4% and 5% of GDP to 10%.

The Oxo Tower on London’s South Bank was redeveloped by the enterprise Coin Street Community Builders. It now contains five floors of social housing run by Redwood Housing Co-op, subject to some of the lowest rents in the capital while being in one of London’s prime spots. Armed forces credit unions are another powerful example of the difference that co-ops can make. They were established after a long campaign by the Co-operative party, and are helping to combat the problem of payday lenders who prey on our armed forces personnel. Those are two remarkable stories, in my view, but much more is possible. Access to capital, further legislative reform, better Government funding, more Whitehall efforts to raise awareness and more expertise on the sector in the civil service are the key asks of Britain’s co-op and mutual sector.

I appreciate that finance is not an issue or problem reserved to co-ops and mutuals, but because of their different ownership models they often have real difficulty in accessing finance for expansion, and indeed for getting started. Big corporations can access large investment through debt funding or, crucially, can create capital by selling shares. Co-operatives and mutuals cannot at the moment do the latter without demutualising. Clearly we need to protect this unique governance model but also allow mutuals to issue permanent investment shares— that is to say, create indivisible reserves—which cannot be distributed to members even beyond the lifetime of the mutual. The European Union states offer this already in their mutual and co-operative legal set-ups, and a further five EU states have it in a slightly different form, yet in the UK we do not offer this route to raising significant finance for co-ops and mutuals.

Such a form of co-op and mutual share capital would offer stronger protection against demutualisation and therefore maintain and enhance corporate diversity. Above all else it would allow co-ops and mutuals to compete in the marketplace with other big businesses without one hand tied behind their back. In the UK building societies have a version of this already, called core capital deferred shares, which allows them to access capital markets without risking their mutual nature, but other financial mutuals and co-ops in the UK do not have anything like that.

Outside the EU, Desjardins in Quebec has raised more than $4 billion through this route, and Australia passed legislation on 5 April this year allowing its co-ops and mutuals to issue share capital while protecting their co-operative and mutual nature. If the Australians can do it, if most of Europe can do it, and if British building societies have it already, why should not British co-operatives and other mutuals also be allowed to raise finance in this way?

I recognise that the Minister and his officials have looked at this once already in the light of Lord Naseby’s successful Bill in the other place, and indeed my own and mutuals’ representations, but I hope he might be persuaded, particularly given that similar legislation is now on the statute book in Australia, to bring key experts in this area together with officials again to try to find a resolution to the problems that have stopped this method of raising finance being allowed in the UK. The Co-operative Group, other retail co-op societies, Co-operatives UK, friendly insurers and the Building Societies Association all support progress on this issue, and I urge the Minister, who has been sympathetic to co-operatives and mutuals in the past, to be willing to take a fresh look at this.

Britain’s co-op and mutual movement suffers from a lack of dedicated banking funds. Across Europe, dedicated mutual or co-op banks exist, are highly profitable and have been around for ages. I have long thought that the Royal Bank of Scotland could and should be converted into a mutual to help address this gap in the UK and to challenge the continuing big banking monopoly in the City. The Minister may not yet be ready to join me in making that jump, so perhaps I can ask him to explore whether the British Business Bank might begin to have a dedicated mutual growth fund to encourage the setting up of new mutuals.

Responsible Finance, an excellent organisation that champions Britain’s existing community banks, highlights the need for dedicated finance for start-up worker co-ops. There is at present an absence of patient capital or capital blended with grants to reduce investment risk for start-up worker co-ops. A dedicated fund would enable specialist co-op lenders to take a higher level of risk in this area and mean that more capital would be available.

[Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)]

Does my hon. Friend agree that almost all start-up businesses have difficulty in accessing finance but that, ironically, it is more difficult for co-ops, notwithstanding the fact that the survival rate of starter co-ops over five years is almost double that of other businesses? That is an anomaly that we would reasonably expect the financial services market to correct.

[Gareth Thomas]

My hon. Friend is absolutely right. I pay tribute to the work of programmes such as Co-op UK’s Hive programme, the resources that are available from Stir to Action, some of the local measures that we have seen in Manchester and Preston, and Social Investment Business’s mutual Reach Fund, but these are all relatively small-scale and need to be scaled up.

The Minister will not be surprised to hear me—and, I suspect, other hon. Members—urge the introduction of further legislative reform to help credit unions offer more services to their members and enable them to invest their members’ money in an expanded range of ways to generate a return for savers. Credit unions are the most active, responsible lenders to the poorest and most financially vulnerable and excluded people in the UK, but they are held back from doing more by outdated legislation and a digital approach to regulation by the Financial Conduct Authority.

--- Later in debate ---

[Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)]

What a pleasure it is to contribute to this debate. I congratulate the previous speakers, who have all, in their own particular ways, not only articulated the benefit of co-operatives, mutuals and so on, but played a part in promoting them during their careers. I think my hon. Friend the Member for Huddersfield (Mr Sheerman) is possibly one of the few people, certainly in the Commons Chamber, whose longevity and experience exceeds even that of my own.

I joined the Co-operative party well over 40 years ago. I spent 18 years as a political organiser in the party: first, trying to combat the process of Thatcherism and privatisation; but secondly, I have to say, trying to convince those within my own political party—the Labour party, which is the sister of the Co-operative party—of the benefits of co-operation and mutuality. It is not a fight that has had just one front.

I joined the co-operative movement all those years ago because I saw it as some sort of middle way. It was different from state ownership, which I felt lacked buy-in from both employees and consumers, and which, while it still had a role in our economy, did not satisfy all the values and aspirations that I felt were incorporated within the Labour movement. On the other side was the shareholder proprietary model, under which it seemed to me the benefits of consumers’ purchasing power and employees’ skills were inappropriately spread, with the shareholders getting a far greater benefit from that combination of organisations. Co-operatives, mutuals and employee share ownership companies were, in their own different ways and in their own different sectors, incorporating those values, and locking in the benefit of employees’ skills and consumers’ purchasing power, in a way that reinforced the quality of the businesses they were engaged in.

It is worth reflecting for a few moments on the sheer longevity of some of the businesses involved. As we all know, the co-operative movement started in Rochdale in the 1840s. Even though there is now a much reduced number of co-operative societies—the largest being the Co-operative Group—they all have histories of well over 100 years, with some in excess of 150 years. Building societies similarly started in the middle and later part of the 19th century, and although there has been a process of amalgamation and in some cases privatisation, they are still a huge player in the financial services market. They may be much changed from their origins, but they still incorporate the basic community-based values that we have discussed.

John Lewis is an employee share ownership company that started in the second half of the 19th century. It started giving its employees shares in the 1920s and is still going strong today. When I look at companies being founded nowadays, I wonder how many will still exist in the next 150 or 200 years. The fact that the basic model of co-operation, mutuality and employee share ownership has survived all the social changes and economic vicissitudes over the last 150 to 200 years is a testament to its resilience, adaptability and relevance in the current economy.

Having said all that, there is a recognition that despite the success of some of the major companies in the sector, and the proliferation within the movement of a whole range of co-operatives, we are still not living up to the potential that the model has in our economy. Ironically, the co-operative and mutual sector plays a far greater part in economies such as those of the United States and Germany, which are by no means considered socialist economies. It is reasonable to look at why that is the case and why we have underperformed in our development of this area.

Previous speakers have highlighted some of the barriers that have existed. The raising of finance is a crucial one, although I will not repeat the lucid exposition of that problem by my hon. Friend the Member for Harrow West (Gareth Thomas). Ironically, the economic rationale for the privatisation of the building societies in the 1980s was their inability to raise capital to expand, so we had that process and we know where it ended up. One cannot help but think that if Governments of that time had looked at providing the financial mechanism by which the building societies could have raised more money, that rationale would have been destroyed. I am not saying that human greed would not still have prevailed in some cases, but it would have been far more difficult to prosecute the case for it.

On company law, the submission by Co-operatives UK and the New Economics Foundation has made it clear that one of the obstacles is an outdated industrial and provident society legal framework. There seems to be a disparity between the way the Government approach this—which is basically not to do much about it, notwithstanding the efforts of my hon. Friend through his private Member’s Bill—and the way in which company law legislation is continually looked at and revised. If it is appropriate for that to be done for the corporate, private sector, why is it not appropriate for the co-operative sector?

Partly as a result of all this, lack of understanding is a big barrier. Ironically, co-ops, building societies and organisations like John Lewis have strong brand identities and public faith in them, yet the public do not really understand what makes those companies different from others, and how, if they wished themselves to organise within a co-operative, they might go about it. We have had a huge proliferation in the number of people going self-employed. Many of those people might well feel that if they knew more about co-operation, they would be better at working with like-minded people in a co-operative structure to deploy their skills even more effectively.

The New Economics Foundation has pointed out that there are some 120,000 family businesses with owners of an age that means that they are likely to retire. Of course, those businesses may go to management buy-outs or be passed on to younger members of the family, and so on. But there should be an opportunity for management to understand and get support for a potential co-operative model in the event of a buy-out post the retirement of the existing owners. The report by the New Economics Foundation points out that if only 5% of the businesses where owners retired went on to co-operative management, that would double the number of such companies. That is a staggering statistic.

Local economic partnerships and other bodies set up to promote business in different areas seem to be either unaware or under-aware of the potential that co-operatives will offer to businesses in their area. This comes back to thinking about a co-operative development agency that would provide a centre for advice and contacts for access to finance, and would be proactive in looking for co-operative opportunities. I am encouraged that the Mayors in Manchester, Aberdeen and South Yorkshire are now considering having co-op commissioners with a brief to look at ways in which they can work with their local regeneration agencies to regenerate under co-operative models.

[Jim McMahon (Oldham West and Royton) (Lab/Co-op)]

I congratulate my hon. Friend on outlining the benefits of co-operatives. The Mayor of Greater Manchester has identified that about 160,000 residents of Greater Manchester are members of co-operatives. He says that that offers a huge opportunity, beyond just having a commissioner in place, and has now launched a call for evidence for the people who co-produce whatever model is developed there. That is a good example of working together.

[Mr Bailey]

I thank my hon. Friend for that example, which underlines the point I am making. Given that these local government structures, and the policies that they are adopting, are in their infancy, it demonstrates the potential that might be available in those areas for other local government structures to actively promote co-operation.

[Mr Baker]

I should have intervened earlier, but I wanted to check something before I put it on the record. A few moments ago, the hon. Gentleman pleaded for updated legislation, pointing out that the industrial and provident society legislation is out of date. I remind the Minister, who I can see is listening very closely to his speech, that in 2010 we promised a co-operatives Bill, but then, when it came forward, it was just a consolidation Bill—a tidying up exercise. I was very disappointed by that, as I expect the hon. Gentleman was. Let me say gently to my hon. Friend the Minister that if we do promise a Bill again, we really must make sure that it is a meaningful Bill that brings the legislation up to date.

[Mr Bailey]

I thank the hon. Gentleman for that prompt to the Minister. Hopefully it is even more effective coming from his side of the House than from mine.

I will conclude by making one or two general observations. First, we have an economy where a huge number of people feel alienated or not engaged with the world of work that is controlling so much of their life. When there is so much international investment—welcome though it is, and sometimes deployed very effectively—that means that decision making and huge swathes of our economy are often centred in offshore countries or very far removed from the control of the company’s employees.

For the past 10 years, we have suffered from low productivity. It is an issue that does not seem to get any better. In terms of taxation and public expenditure, there are still huge swathes of the economy where the companies involved are not paying an appropriate level of taxation. It is interesting to note that the co-op movement pays more in taxes to the Government than a whole range of high-tech companies, including Google and Amazon. Developing the mutual sector would at least ensure that as these companies grow, they are paying the sort of taxation returns to the Government that would more than pay for any help they had had from Government.

I do not claim that the co-operative and mutual movement is a silver bullet for all these problems, but their performance in terms of both longevity—there are far higher survival rates among new co-operatives than other businesses—and worker satisfaction means that there is a strong case for far more proactive Government involvement and support. To take up the point made by the hon. Member for Wycombe (Mr Baker), I hope the Government will look at introducing a co-operatives Bill that will actively deliver on the ground.

Beer Taxation and Pubs

Adrian Bailey Excerpts

Thursday 28th March 2019 Commons Chamber

[Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)]

I congratulate the hon. Member for Dudley South (Mike Wood), my near neighbour, on securing this debate. He mentioned Baynhams beer, of which I am a regular consumer and supporter, and Ma Pardoes pub, where I am a regular visitor. In fairness to all the other Black Country beers and drinking places, I must say that it is a fantastic area for anyone who loves their beer. The sheer range of craft and real ales there is phenomenal.

I particularly welcome the debate because it is framed in the context of the taxation regime for pubs. We need a change in that regime, but that alone will not protect our pubs and their heritage unless it is allied with a change in the supervisory and regulatory relationship between pub tenants and pub-owning businesses.

Let me touch first on the tax regime, although Members have covered most of this. There is obviously a case for looking at alcohol duties. The fact that high-alcohol beers and ciders are taxed at hugely different rates is in itself a reason for looking at them. The fact that high-alcohol spirits are taxed at a lower rate is another reason for looking at them. Ultimately, it is the job of the Treasury to have a comprehensive review of these duties. That should be designed first to promote social drinking, secondly to sustain pubs and lastly to sustain Exchequer revenues.

[Ruth Smeeth]

My hon. Friend has touched on the fact that there are differential duties. Does he agree that it is ludicrous that there is still, in effect, a subsidy for cider producers whose products contain high levels of alcohol, when that is not the case for beer? There needs to be a level playing field across the sector.

[Mr Bailey]

I agree with my hon. Friend. Given the increased consumption of cider and the increased tax revenues from it, I would have thought there was a case for looking at the relative taxation levels of the two drinks.

Business rates have been mentioned. I will not go over the details, but we have a ludicrous situation whereby someone who invests in their business and increases their turnover often gets a huge increase in their business rates as well. One example given to me involved somebody who took over a pub that had traded at £200,000. He raised that to £700,000 but then found that his business rates had gone from £8,400 to £37,000. He did get that reduced to £24,000, but the mere fact that he had such a big increase and that it was then revised would seem to demonstrate that the process for evaluating business rates is deeply flawed. I recognise the Government’s attempts to do something about that, but we really need a comprehensive review of business rates so that they are geared in such a way as to promote and reward investment rather than penalise it.

[Mrs Main]

The hon. Gentleman is absolutely right. I have had similar experiences, with pubs putting in the investment and then finding themselves penalised. However, they say that when they put in a challenge, it takes a long time and it is difficult to get an explanation as to why the final figure is arrived at. There is not the transparency over the rateable system that there should be.

[Mr Bailey]

I totally agree. The process is opaque and would often appear to be perverse as well. There is a big case not only for revising it but for making it far more transparent so that anybody investing in their business can get a clear idea of what the potential financial penalty—if that is the word—would be on their investment.

I want briefly to touch on the pubs code and the Pubs Code Adjudicator, which my hon. Friend the Member for Chesterfield (Toby Perkins) mentioned. I am the former Chair of the Business, Innovation and Skills Committee, and a member of its predecessor Committees, and we examined time and time again the relative balance in power between the pub tenant and the pub owner, as well as the relatively low level of income that tenants running even the most successful pubs obtained from all their efforts, relative to the revenues accrued by the pub-owning business.

The pubs code was agreed by the Secretary of State for Business, Innovation and Skills in the previous coalition Government, and I give him credit for that. A Pubs Code Adjudicator was appointed to adjudicate and to try to ensure that there was a fair balance of risk and reward between the two parties. It is fair to say that the appointment of Paul Newby was controversial, and a lot of concerns were raised. On the basis of the evidence we are getting back from tenants, those concerns were well founded. The changes do not seem to have affected the rate of pub closures whatsoever; indeed, the number of tenants who are still finding that the reward they get from all their efforts is totally inadequate does not seem to have changed either.

I welcome the fact that the Government are about to undertake a review of the working of the code and the adjudication. The essential thing is for the Pubs Code Adjudicator to act as an adjudicator and not just to enable negotiation between the pubco and the tenant, which actually reinforces the imbalance of power between the two. All too often, pub tenants find themselves negotiating against not only the pub company but their solicitors as well, and they are not in a position to have equivalent legal advice.

I conclude by saying that saving the pub involves two things: a radical transformation in taxation, but also the reinforcement of the legal protections for the pub tenant against the pub-owning business.

Spring Statement

Adrian Bailey Excerpts

Wednesday 13th March 2019 Commons Chamber

[Mr Hammond]

In total, more than 220,000 new homes were built last year. That is the highest total in all but one of the past 31 years. This is not about money. This is about the capacity of the industry to deliver. We are taking steps not just to build houses, but to support the industry to expand by funding directly smaller and medium-sized enterprises so that they can expand the capacity of the house building industry.

[Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)]

To end Brexit uncertainty, business wants a commitment to the customs union; frictionless access to the EU market; and the skilled and unskilled labour that comes from it. Will the Chancellor commit to supporting a deal that delivers just that?

[Mr Hammond]

I am committed, as I have been since 2016, to delivering a deal that allows us to continue our complex and long-established trading relationships with the European Union—our closest neighbours and most important economic partners. I will continue to advocate such a deal.

Oral Answers to Questions

Adrian Bailey Excerpts

Tuesday 5th March 2019 Commons Chamber

[Elizabeth Truss]

In response to my right hon. Friend, I can say that one of the things we have done is to introduce a national funding formula to make sure schools funding is more fair across the country, and it is getting fairer every year. I would be delighted to meet her and other colleagues.

[Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)]

The Chancellor has claimed that the best way to protect the public finances from a decline in the motor industry post-Brexit is to back the PM’s deal. The Society of Motor Manufacturers and Traders says the best way is for the Prime Minister to abandon her red lines and be part of a customs union. Who is right?

[Mr Philip Hammond]

As the Prime Minister has explained to the House many times, the deal that we have negotiated with the European Union provides for most of the benefits of a customs union, while still enabling the United Kingdom in certain circumstances to be able to strike trade deals with third countries. That is a win-win outcome, and the House should get behind it.

Oral Answers to Questions

Adrian Bailey Excerpts

Tuesday 29th January 2019 Commons Chamber

[Mr Hammond]

My hon. Friend is right. The public finances have reached a turning point. This is the first time in 17 years that we are not borrowing for day-to-day expenditure. Debt has peaked and now begun to fall—its first sustained fall in a generation—and the last thing we want is for the hard work of the British people to be thrown away by the incompetence of a Labour Government delivering higher debt and higher interest payments, which they always do.

[Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)]

The Bank of England has forecast a range of negative impacts on the economy from Britain’s leaving the EU, with or without a deal. What assessment has the Chancellor made of the impact of these on the public sector deficit and his current public spending plans?

[Mr Hammond]

The Government have made a cross-departmental assessment of the medium to long-term effects of different Brexit outcomes, which the Government have published. The Bank of England, because it is better equipped to do so, has made an assessment of the short-term impacts of leaving the EU under different scenarios, which it has published.

European Union (Withdrawal) Act

Adrian Bailey Excerpts

Thursday 6th December 2018 Commons Chamber

[Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)]

I represent a Black country constituency that is heavily dependent on manufacturing companies, the business models of which are deeply integrated with Europe. It is also a constituency that voted overwhelmingly for Brexit and, out of respect and having voted for the referendum, I felt that I had to follow the logic in that decision through.

I voted for the triggering of article 50 to be consistent with the referendum result, but I also voted for it because I felt that it was only when we entered into detailed negotiations with the EU that we would actually get some idea of the difficulties of realising the promises that were so easily, and often falsely, made to our electors during the referendum period. Far from having countries queuing up to do deals with us, and far from having the EU desperate to do a deal with us because of our relative economic influence, the Government have run up against as yet unresolved difficulties. We must recognise that the so-called transitional period is in fact a recognition of our failure to come up with a deal that actually conforms to the needs of our vital manufacturing industry and, of course, addresses the issues around the Northern Ireland border.

It is important to test the proposals against the requirements of manufacturing businesses. To be quite clear, companies have come to me to say that they are desperate that we accept the deal, not because it is better than the status quo, but because they are so frightened of the cliff-edge, no-deal scenario that they see looming ahead. I therefore want a commitment that, whatever else happens, there will not be a no-deal outcome. However, businesses also acknowledge that this proposal is not a deal as such. It is little more than a wish list wrapped up with warm words and good intentions. The fact that there even is a backstop proposal is tacit recognition in itself that the warm words, whatever they say, may not be realised.

If we get into the backstop, we will be in a position that in many ways replicates elements of a no-deal scenario. The Attorney General acknowledges in his legal advice that the backstop could lead to friction at borders between mainland UK and the EU and with mainland UK and Northern Ireland, which is a totally unsatisfactory and potentially dangerous position for our manufacturing industry. At the end of the day, I cannot see any resolution of the issues around the borders between Northern Ireland and Eire, the UK and Northern Ireland, and the UK and the rest of Europe that does not involve a convergence of regulation, the membership of a customs union and a trading bloc. I will not back a deal until that situation is on the table.

Oral Answers to Questions

Adrian Bailey Excerpts

Tuesday 6th November 2018 Commons Chamber

[Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)]

4. What assessment he has made of the potential effect on the OBR’s Budget 2018 forecasts of the UK leaving the EU without a deal.

[The Economic Secretary to the Treasury (John Glen)]

The Office for Budget Responsibility has set out its forecasting assumptions regarding EU exit and will update them when the details of a deal justify a forecast change. Parliament will be presented with the appropriate analysis to make an informed decision ahead of the vote on the final deal. It is in the interests of the EU and the UK to strike a deal, and we remain confident that we are on track to achieve a mutually advantageous deal in the near future.

[Mr Bailey]

The Chancellor’s Budget measures were based on OBR assumptions of an orderly withdrawal from the EU and a 21-month continuation in the customs union. In the event of a no deal, will the Minister share with the House the assessment he has made of the potential decline in tax revenues and consequential changes to his tax and spending plans in the Budget?

[John Glen]

The Government are fully committed to achieving a good deal with the EU. We will make lots of assessments during that process, but our mind is focused on achieving that deal and the Government will achieve it.

Oral Answers to Questions

Adrian Bailey Excerpts

Tuesday 3rd July 2018 Commons Chamber

[Robert Jenrick]

As I have just described, the automotive sector is extremely important, and few of its businesses are more important than Jaguar Land Rover, which I appreciate is close to the hon. Gentleman’s constituency. Car sales in 2017 were actually 25% higher than in 2010 and the UK remains the second biggest car market in Europe after Germany, so there is a great deal to celebrate in the UK automotive sector, and we will continue to support it.

[Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)]

20. In the light of Brexit, just this morning the British Chambers of Commerce published a list of two dozen vital questions to which British business needs answers, 10 of which are specifically relevant to the car industry. What assessment has the Chancellor made of the potential loss of business investment in the UK car industry as a result of the Government’s failure to provide answers to those questions?

[Robert Jenrick]

We are working closely with the automotive sector, and the Treasury and other Departments have met its representatives on a number of occasions. The Prime Minister has made it clear that our intention throughout the current negotiations is to ensure that EU-UK trade is as frictionless as possible. We will continue to work with the automotive sector to ensure that we deliver a good Brexit deal for it.