UK’s Withdrawal from the EU

Debate between Alison McGovern and Matt Western

Thursday 14th February 2019 Commons Chamber

[Alison McGovern (Wirral South) (Lab)]

It is truly an honour to follow the right hon. and learned Member for Beaconsfield (Mr Grieve). I was in Belfast and Bangor last week, where I met many people who felt that they had been forgotten by this House—not by their own Members of Parliament, but by the House at large. I want to say to them that they have not been, and will not be, forgotten. Members of the Irish community in Liverpool said similar things to me over the weekend, and I say to them that we will not forget the Good Friday agreement. We will do everything to protect it. That said, I agreed, perhaps surprisingly, with the hon. Member for Wellingborough (Mr Bone) when he said that he was against the deal because it offered absolutely no certainty for the future, and would simply continue this charade for years to come. He was absolutely correct.

I want to make some brief comments about the politics and the economics of the situation that we are facing. First, the politics. The behaviour of the European Research Group in the past 24 hours has been an absolute disgrace. It is interested only in its own power; it does not want a deal of any kind. It wants to lead the Government and our country on a dance, and until we all realise that, we will be kept going round and round this roundabout. The dealmakers in this House are over here on the Opposition Benches. It is unsurprising that people from the Labour movement know how to negotiate and do a deal. The Government should always have looked to us, but we have been ignored. We are simply pawns in a game in which the players are fighting not for our country but over the soul of the Tory party.

I have some sympathy with Labour Members who do want to find a deal, but that takes us back to the problem that was pointed out by the hon. Member for Wellingborough. Anything in the political declaration about the future framework is, frankly, pie in the sky, because it answers no questions. What is more, it is difficult to take the Prime Minister at her word, as she has demonstrated. It is incredibly difficult to trust the Tories.

That said, on the economics, the problems are even more profound. Economists talk about sunk costs—things that we spend money on that seem like a good idea but turn out to be a bad idea. In that sense, Brexit is now a sunk cost. We have been spending money hand over fist on no-deal preparations that we hope to never need. However, in economic terms, no deal is already happening. Disinvestment is already happening. Currency shifts are already costing us in terms of inflation, and growth is losing pace.

Things are worse than that, however. Some people will rightly tell me, “Well, the overall growth figure doesn’t really matter, because my constituents are poor enough already,” but the fact is that people in areas in the north of England that voted for Brexit will be hit worst by it. North-south inequalities will not be helped by Brexit; they will simply be made worse. That is why Brexit is a sunk cost. Sticking with a plan simply because we have already spent money on it is irrational. That is why we must ask ourselves the hardest of questions. Should we really keep going along with Brexit just because we said we would—despite the costs and whatever happens—because we have spent money on it, even if it turns out to be a really bad idea?

[Matt Western]

My hon. Friend is making a powerful speech. We are now in “Project Reality”, not “Project Fear”. As she says, we are beginning to see some of the indicators of what is happening in our economy. Consumer confidence is at its lowest since 2012, and business confidence is also low, with four consecutive quarters of disinvestment. That is what is really eating away at the economy, and we should be tackling it.

[Alison McGovern]

I simply listen to the words of the right hon. Member for Meriden (Dame Caroline Spelman) and my hon. Friend the Member for Birmingham, Erdington (Jack Dromey). I find it hard to listen to them talk about the unemployment rates in their constituencies and to think that Brexit has anything to offer them. It will be a hindrance, not a help.

Some people who voted for Brexit who are not from the poorest parts of the country will say that, to be honest, they are not bothered about the cost. They want all the other things that people talk about, such as this notion of sovereignty, even though we have shared sovereignty as a nation for many years. They will say, “It doesn’t matter what it costs; I just want it.” Brexit is worth it to them. That is fine for those people. It is fine for someone to take an irrational decision for themselves. If that is what they really want, fine. However, the question for us is whether it is okay to take an irrational decision on the behalf of other people. Do not we owe our country something a bit better than that?

UK Automotive Industry: Job Losses

Debate between Alison McGovern and Matt Western

Tuesday 22nd May 2018 Westminster Hall

[Matt Western (Warwick and Leamington) (Lab)]

I beg to move,

That this House has considered job losses in the UK automotive industry.

I thank Mr Speaker for granting this debate. I also thank you in advance for your chairmanship, Mr Bone.

“Precipitous” is not a word used very often; when it is said by the chief executive of a major global automotive manufacturer, it is time to listen. Why? Because such utterances from major industrialists are rare; such people prefer to keep out of the headlines and to get on with the day-to-day of running multibillion-pound organisations that employ hundreds of thousands of people.

In the UK, the automotive industry has been one of the great success stories since the financial crash of 2007-08. In the two decades before that crisis, the industry’s economic output was broadly flat, before it dropped sharply in 2009. Since then, we have been fortunate to witness a renaissance in this major industry, which was seriously damaged by the crash, but which managed to sustain itself, with some Government intervention, through that difficult period. In 2017, in real terms, the motor manufacturing industry was worth 25% more than in 2007, although growth appears to have levelled off in the last year. In 2007 motor vehicle manufacturing accounted for 5.4% of total UK manufacturing, but in 2017 it accounted for 8.1%—a 50% increase in its overall importance. That was the result of significant inward investment from all resident vehicle manufacturers and component suppliers. The industry has contributed to almost 10 consecutive years of steady growth. Just as importantly, that has translated into a 29% increase in direct manufacturing employment in the sector.

The headwinds are strong and many. As the industry meets the challenges of transitioning to cleaner fuels and to a super-low-carbon future, it has been disrupted by the uncertainty of Brexit and a Government policy that penalises the cleaner diesel-powered vehicles. It is one of the great paradoxes in business that, in seeking to improve air quality, the Government have managed the reverse the progress achieved over many years to reduce carbon dioxide emissions.

In my maiden speech last year, I stated that there were rising pressures on the industry and that action was needed to maintain its recent success. I warned of the slowdown, with falling sales, and that the industry represented an economic bellwether. It has become increasingly clear that, from trucks to cars, sales are falling as people decide not to replace their vehicles.

I have repeated those calls in many subsequent debates, and there have been many in recent months, including those held by my hon. Friends the Members for Dagenham and Rainham (Jon Cruddas) and for Ellesmere Port and Neston (Justin Madders). Both of their debates reflected the rising concern about the real, clear and present danger to the sector, and sought the attention of the Government so that they would act.

That danger has become very real since the autumn, with the announcement of job losses all over the UK. To date, 2,000 jobs have been lost among car manufacturers, and planned increases in staff recruitment have been put on hold. More widely, when the component suppliers and related sectors are taken into account, it is estimated that between 8,000 and 12,000 jobs at least have been lost in just eight months.

[Alison McGovern (Wirral South) (Lab)]

I congratulate my hon. Friend on getting this crucial debate. Given the numbers that he mentions, does he think we ought to return to the subject of the last debate we had here—business rates? The car industry needs a shot in the arm; is it not time that the Government gave it one?

[Matt Western]

I totally agree with my hon. Friend. The business rates situation handicaps the industry in this country and puts it at a significant disadvantage to competitors on the continent. Added to that are the energy costs that it faces: on average, there is a 74% premium on the energy costs on the continent.

Major manufacturers have told me that their greatest concern is that there seems to be little concern from the Government. It is disheartening that this apparent lack of interest flies in the face of the industry’s importance to our overall economy. The financial services sector is held up as the great driver of UK national wealth, but it is worth remembering the increasingly important contribution of the UK motor vehicle manufacturing industry. According to the Library, it generated £15.2 billion of value to the economy in 2017, which is 0.8% of total output. More relevantly, it represents 8% of manufacturing output. Likewise, it employed 162,000 people across the UK in 2016, equating to 1% of all UK employees.

In UK manufacturing, the automotive industry is the second most investment-intensive sector for total investment as a proportion of gross value added, although it is top in value terms, investing £3.6 billion in 2015. The west midlands has the largest number of people employed in the manufacture of vehicles in any UK region or country—perhaps that is why this subject is so close to my heart. The 54,000 employees in our region represent around a third of all motor industry employees in the UK.