Government’s EU Exit Analysis

Debate between Alison McGovern and Andrew Bridgen

Wednesday 31st January 2018 Commons Chamber

[Alison McGovern (Wirral South) (Lab)]

It is a pleasure to be in this debate under your chairship, Madam Deputy Speaker. I normally find it a pleasure to debate the hon. Member for Dover (Charlie Elphicke), but being referred to as an “elite” by a representative of the Conservative party sticks in my craw. Coming from an ordinary background and having fought to get here to speak on the behalf of my constituents, who take all kinds of views on the economy, it pains me to be attacked and accused of being part of some kind of elite that is unconnected from my constituents. That is a disgraceful way to conduct this debate.

I want to make two simple points. The idea that all forecasts are wrong and that everything will be all right in the end is a myth. It is the easiest thing in the world to stand up here and say, “Blame the economists. Blame the forecasters. This is all crystal ball stuff,” and the Under-Secretary of State for Exiting the European Union, the hon. Member for Wycombe (Mr Baker), gave us an excellent example of that kind of nonsense yesterday. An economic forecast is a set of assumptions and a set of data for the current state of the world and then a long sum that allows us to make some conclusions about what particular circumstances might mean for GDP, employment and a range of other economic variables. It is just maths.

[Andrew Bridgen]

Has the hon. Lady ever heard the phrase “garbage in, garbage out”? If we use garbage figures and make garbage assumptions, we will get garbage out of the other end.

[Alison McGovern]

The hon. Gentleman just made my point for me. It is just maths. It is clear and transparent. There is a set of assumptions, a set of data and a set of conclusions. If he thinks that some of those assumptions or some of the data are garbage, it is up to him and those who agree with him to show their working. All that they have to do is do the maths better than the forecasters. We do not have to have a stupid row about whether forecasters get everything wrong all the time, with people saying that we should not believe them anyway. We just have to be transparent and show our working and then we can disagree honourably and openly, rather than making constant ad hominem attacks against people who are not here to defend themselves.

To be frank, I have criticised how economics has been conducted in the past, and I agree with some criticisms of the traditional assumptions made in economics, but this debate is not about that. This is about whether we ought to know about the economic consequences of the various options before the Government, and it is certain that we need Government economists to model various outcomes. The last person to have a massive pop at economic forecasting was our friend George Osborne. I remember well that he loved to tear a strip off the former Prime Minister Gordon Brown’s economic forecasts, thinking that it was a great old argument to accuse the then Labour Government of fiddling the figures. What did George Osborne do? He set up the Office for Budget Responsibility so that we would have independent forecasts, and I will return to that when I conclude my remarks.

I caution Members against making the kind of remarks that we heard earlier in this debate—that things will somehow be okay in the long run, and that short-term forecasts and estimates of the fall in GDP do not really matter because things will all work out in the end. All that will obviously be true if we wait long enough, but how long will we have to wait? I urge Government Members to consider not just the “it will be all right in the end” point of view, but the damage done in the meantime. The past shows us that we cannot just wait forever. If a regional economy is de-industrialised and damaged, we know how long it takes to recover. Economists call it hysteresis—the act of scarring. If a factory in a town is shut down, that town may never recover economically. That is why this is not just about the long term. Brexit has the capacity to exacerbate inequality severely and significantly, so we cannot accept that things will be all right in the end.

We need proper modelling of not just the global effect on GDP or the effect on employment, but of the effect of the Brexit proposals on each and every town in our country. The OBR has asked the Government on numerous occasions for a statement of policy so that it can make a forecast and model it. The spring statement is coming up, so I say to the Minister, as I said yesterday, that he should do the decent thing—do what George Osborne would have wanted—and give the OBR a statement of policy and let it be modelled. Then we can all see what the Government’s Brexit has in store for our country.

UNHCR Syrian Refugees Programme

Debate between Alison McGovern and Andrew Bridgen

Wednesday 29th January 2014 Commons Chamber

[Alison McGovern]

My hon. Friend makes an incredibly important point. The conditions in the camps were well described by the hon. Member for Brent Central, and we must all remain focused on that important situation, but there is also a massive crisis, which could quickly turn into an economic crisis, for those countries that have welcomed refugees into their cities. We must support not only the refugees, but the host communities. They were not wealthy to begin with and now, as a result of their generosity, risk a difficult economic future.

I will end my remarks by sharing with the House the words of some of the refugees, as documented by the support agencies. I think it is important that we listen to the words of those affected. The World Food Programme reported on the condition of refugees in December 2013 and told the story of Zakiya. She and her three daughters fled to Latakia, carrying little more than the clothes on their backs. She said:

“It was a matter of life and death the day we fled; we could hear the fighting approaching our area quickly and we had to run; we had no choice… I only had time to collect some cash and it was barely enough to cover our transport, let alone buy bread and water to survive”.

It is very important that we remember not only the reality of the situation faced by refugees fleeing present danger, but the possible long-term crisis for a whole generation in the region. They will have to cope with the limits that have been placed on their hopes and ambitions by the absence of sufficient education and health facilities. They are facing not just the return of polio and significant diseases, as I have said, but more mundane risks from illness and infection disease—threats that we all live without because we have everyday health care.

We all just assume that our children will go to school. Reema—not her real name—told Oxfam:

“I miss my teachers. I miss my classes, my English classes, my Arabic classes, my music classes. Now I’m just sitting here every day.”

There is real despondency. That is why I believe that we must take this opportunity, in this House of Commons, to show that we are not helpless in the face of this terror.

[Andrew Bridgen (North West Leicestershire) (Con)]

Will the hon. Lady give way?

[Alison McGovern]

I will.

[Madam Deputy Speaker (Mrs Eleanor Laing)]

Order. We have very little time remaining. Members who have not been here for the whole debate have sought to intervene, and the time given to each Member who speaks is increased with each intervention, so those who have waited all afternoon to speak will not have a chance to do so. The hon. Gentleman may make his intervention, but the hon. Lady will not get extra time because of it.

[Andrew Bridgen]

I will be brief, Madam Deputy Speaker.

Given that the UK Government have already committed £600 million in humanitarian aid for the Syrian refugees, which is 12 times more than France has donated, and indeed more than the rest of the European Union put together, does the hon. Lady agree that what we really want is for more countries to make the commitment to the Syrian refugees that the UK has made?

[Alison McGovern]

I am proud of the UK Government’s contribution, but I do not believe that it is my place as a British politician to judge others. Rather, I wish to encourage them to do all they can.

In conclusion, as we have seen today, we are not helpless in the face of this terror. We can step in and stand between refugees and destitution. I am glad that, by and large, this House has today agreed to do that.

Jobs and Growth

Debate between Alison McGovern and Andrew Bridgen

Thursday 17th May 2012 Commons Chamber

[Alison McGovern (Wirral South) (Lab)]

I shall start my remarks by talking about the announcement by General Motors about Vauxhall at Ellesmere Port. I represent many, many people who work there and I pay tribute to that excellent work force and the community around them who support them. Whilst I recognise the commitment of all politicians who have helped back Ellesmere Port, in Wirral all of us know somebody—a family member or a friend—who has worked incredibly hard for this, and it is those people I am thinking of most and congratulating today.

I would like to make a few remarks about unemployment. Our commentary on employment, I am afraid, often shows the limits of the way we do our politics. The news, and we ourselves, often obsesses about the figures—the monthly movement up and down—and whilst those are important indicators, of course, it is the trend that really matters. We often worry about the weather when we should be thinking about the climate that we are in, and sadly, the unemployment figures are worse than those for this time last year. According to the Library, the number of people claiming jobseeker’s allowance is now 106,000 higher than in April 2011. That is incredibly worrying. The Chancellor mentioned the figures for two years ago. Unemployment plateaued in 2010. It is growing again now and we need to worry about why.

To add to the problem that we have, our understanding of the impact of unemployment and the lack of the necessary jobs in our economy is limited. I recently tabled a parliamentary question, asking the Treasury what assessment the Department had made of the medium and long-term cost to the Exchequer of the current level of unemployment. That matters because unemployment has a wide range of impacts. The Treasury did not give me as full an answer as I would have liked. I would have liked to know how unemployment impacts on the health budget in the form of increased costs; how much funding is being made available for the regeneration that is needed; and the impact of unemployment on crime levels.

[Andrew Bridgen]

In the shadow Chancellor’s speech, he made much of the apparent increase in long-term youth unemployment. Is the hon. Lady aware of the cynical way in which the last Labour Government manipulated the figures for long-term youth unemployment by cynically bringing people in for a one-week training course and then restarting the clock immediately after, to keep the figures down? That was a cynical measure, which this Government have stopped.

[Alison McGovern]

I thank the hon. Gentleman for his intervention. I have thought a lot about youth unemployment over the past years. The former Government oversaw radical improvements, such as our intervention in the labour market with things like the new deal. I find it hard to characterise any of that work, which has been recognised around the globe, as cynical. I find that very difficult to believe.

Banking Reform

Debate between Alison McGovern and Andrew Bridgen

Monday 29th November 2010 Commons Chamber

[Andrew Bridgen]

The hon. Gentleman makes that point, but the previous Government encouraged and took part in an orgy of credit: in fact, they led it, and invited individuals and corporations to join in, safe in the knowledge that the former Prime Minister said that he had ended boom and bust, which now sounds as ridiculous as King Canute claiming he could turn back the tide. The taxpayer now has the hangover from that 10-year orgy of credit.

Under the former Prime Minister’s watch, the Bank of England deliberately stoked a consumer boom that led to spiralling house price inflation and massive levels of personal debt. This is not just my opinion, but that of the previous Governor of the Bank of England, the late Lord George, who said of that period:

“We knew that we were having to stimulate consumer spending. We knew we had pushed it up to levels which couldn't possibly be sustained into the medium and long term.”

That approach led to 20% house price inflation when the consumer prices index was running at 2%, led to financial institutions such as Northern Rock offering 120% mortgages, and ultimately led to a run on a British bank and the financial crisis of 2007. Opposition Members might blame America, global markets, or even the fact that we are not in the euro, as ridiculous as that sounds, but this misguided belief, and the hubris of the previous Prime Minister in believing that he had ended boom and bust, helped to contribute to the banking collapse. It is fascinating that the shadow Home Secretary—or perhaps I should say the shadow shadow Chancellor—stated that the cause of the deficit was not the previous Government’s borrowing, but rather the collapse of tax revenues. He failed to recognise that tax revenues based on rapid house inflation and excessive consumer credit are totally unsustainable.

The failure of the previous Prime Minister’s regulatory regime also contributed to the problem. It was clear in the early part of the decade that the UK had an unsustainable consumer credit funding gap: the IMF said so, as did the previous Governor of the Bank of England. The power to regulate had been transferred from the Bank of England to the Financial Services Authority and the Treasury, with an inadequate definition of roles and responsibilities. It was an absolute disaster, as was shown at the height of the Northern Rock crash, when Mervyn King was asked, “Who is in control?” and his answer was, “That depends on how you define ‘in control’.” The answer was that nobody was in control, and no one could see who was in control. One cannot have a third of a problem—one wants all of the problem or none of it. That was part of the difficulty.

So where do we go from here? I am a firm believer in sound money. A sustainable banking system is one where lending policies are closely in sync with the projected economic activity of the people it serves, not driving them.

[Alison McGovern]

Does the hon. Gentleman recall, as I do, that the previous Conservative Government left the country with a deficit of 3.4% which was going towards ongoing spending, unlike the debt in 2008, which accorded with the “borrow to invest” rule? In relation to sound money, what does he think about that?

[Andrew Bridgen]

I thank the hon. Lady for her point. She, like me, was not in this place at that time. I was in business running a corporation. I fixed the roof while the sun was shining, and I put my company into net credit three months before the banking crash happened.

We need a Government—and a regulator—who do not deliberately go to sleep at the wheel for political advantage, as the previous Government did. We must never let a bubble like the one that built up under the previous Government build up again. Our plan for growth depends on a sensible and sustainable banking system alongside more powerful incentives from Government. We must never return to the bubble that ended in the financial crisis and allowed banks to lend unsustainably under a tick-box regulatory system and a short-termist, feckless Government concerned more with political advantage than with the long-term interests of the country. In short, we need to look at creating a body that is solely in charge of financial stability and has responsibility for macro-economic supervision.